Everyone wants to get paid on time – in fact the top priority of most Accounts Receivable departments is to be paid faster. If yours is a buying organization wanting to pay more of your suppliers electronically — through card-based virtual payments — you can use this AR top priority to your advantage.
The Huffington Post released data last year from Sageworks (a financial information company) revealing the industries that wait for the longest to be paid.
Are any of your suppliers in these industries? If so, this is the perfect opportunity to reach out and share the tips below for how they can get paid faster — by accepting virtual card payments.
Card-based virtual payments allow suppliers to:
- Get paid faster. With electronic payments, the payment on an approved invoice is processed at the point of transaction and sent directly to the supplier’s bank account. Getting paid faster can also translate into reduced days sales outstanding and increased working capital.
- Keep bank information secure and eliminate payment fraud. Unlike with payments made by ACH or wire, electronic card payments don’t require suppliers to share bank account or other sensitive information with their buying organizations, thus exposing that bank account info to compromise.
- Simplify reconciliation. Electronic payments include detailed remittance information with the payment, including line-item, Level-3 data on the invoice detail. With improved remittance data received in conjunction with the payment, suppliers can simplify payment processing, reconciliation, and reporting.
Some suppliers may still hesitate to accept electronic card payments due to the interchange fees, which require suppliers to pay a percentage of the transaction amount to card networks and issuers. However, receiving payments faster and more securely, and with detailed remittance data, can far outweigh the cost of interchange fees. Plus, decreased days sales outstanding plus a more consistent cash flow can help increase overall working capital for suppliers.
Want to learn more about convincing your suppliers to accept e-payments? Contact Jeff Lavoie, V.P. of Sales at Lost & Found Inc. at 704-662-0074 or visit our website at www.lostandfoundcorp.com.
Tom Parrish is SVP of Sales at Kontrol Payables, a Lost&Found partner focused on commercial payments solutions.