3 Best Practices for Launching an Electronic Payment Strategy

While electronic payments are becoming more widely accepted in consumer transactions, paper checks are still the most dominant method of business-to-business payments. Converting these checks into electronic payments can lead to increased efficiency and generate substantial savings.

As businesses consider various ways of sending vendor payments, shifting to more secure, electronic methods is almost always a subject of discussion. If your business is considering electronic payments, whether it’s to augment existing programs, focus on eliminating the ‘long-tail’ of paper checks, or start from scratch, here are a few helpful hints that may improve the results of the initiative:

1. Think long term. Define your goals, then prioritize them. The first question a business should ask is: Why is it important to move vendors to electronic payments?

A few considerations:

  1. Rebate realization (creating revenue through commercial card and other fee-based payment programs)
  2. Payment security (avoiding fraud from paper checks or ACH)
  3. Process efficiency (having less check processing overhead)

With each consideration, understand that there might be unintended consequences of prioritizing one above another.  The key is to align each consideration with the overriding objective of your overall payment strategy. 

For example, vendors moving from paper checks to ACH are less likely to accept a commercial card product (like virtual credit card or P-Card) in the future.  This is because vendors who already receiving electronic payment to their bank account may see less value in another method that costs 3% of the payment.  Alternatively, if the strategy is defined and prioritized, and it’s determined that rebate is the critical objective, you will have better outcomes if the virtual credit card initiative is implemented before ACH. 

Alternatively, if the objective is process efficiency or security, prioritizing card isn’t as crucial because the ramp period will be longer.  

Financial technology companies, like Viewpost, can offer a unique alternative to the transitional prioritization process.  Viewpost offers a holistic approach to electronic payment enrollment that maximizes the rebate potential of AP spend without sacrificing overall adoption.

2. Align internally on process ownership. If different departments manage vendor master data, ensure each department has a documented process for gathering payment account information. 

For instance, if procurement or contracting departments are responsible for new vendor setups, and accounts payable is only responsible for changes, ensure that there is a policy in place to immediately push any change requests that are received by contracting to AP for review, authentication, and implementation.

Create redundancies in the process to avoid being tricked. The New York Times reported via Emsisoft (a firm focused on security) that there was a 41% increase in company files attacked by ransomware in 2019. It’s prudent to inform vendors that by policy, change requests for payment accounts cannot be made via email.  Advise teammates not to click on links or open attachments without verbally speaking with the vendor, and verify changes with the vendor directly by telephone.  Never assume that an email originated from a trusted source unless you have spoken with someone you know.

3. Consider technology partners to help mitigate risk.  Sometimes organizations don’t have the administrative or technical resources to implement electronic payment programs, but they do understand the importance. Other organizations have resources, but don’t have the administrative support to maintain them. 

In these cases, the solution can be found in a technology partner to help facilitate the transition from paper checks to electronic transactions. At Viewpost, our focus is on simplifying and improving electronic payments by reducing operating costs and optimizing rebate revenue. Our process eliminates the administrative burden of implementation and maintenance, while simultaneously offering a secure option for vendor enrollment and payment management. 


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