Effortless Transition from Manual to Electronic Payments
Anna Barnett 14 Aug 2015As organizations focus more on cost control and efficiency in their back-office operations, electronic payments (ePayments) solutions are taking finance departments by storm. ePayments bring many benefits, including reduced processing costs and Purchase-to-Pay cycle times, increased convenience for employees, the ability to increase days payable outstanding (DPO), and improved compliance with contracts and purchasing policies. Businesses can use ePayments in a variety of ways, including ACH, wire, and commercial card programs. These methods bring huge savings, particularly certain commercial cards that supply payment rebates to buyers (e.g. Virtual Card Accounts).
Although the benefits of electronic payments are plentiful, many North American companies remain resistant to adoption. According to results from a PayStream Advisors’ market survey focusing on B2B payments, most organizations still use checks for the majority of their payments, see Figure 1. PayStream found that 43 percent of organizations surveyed were “heavy check users,” or those that use checks for at least three-quarters of their payments.
What is the main reason behind resistance to ePayments? Many organizations stick with manual payment methods because they are simply more comfortable with them—they fear moving from their “tried and true” strategies. Heavy check users share beliefs and strategies in their payment management that fit with this reluctance towards change, see Table 1. These organizations, most of them small to medium-sized businesses, experience more payment processing pains than organizations with high payment automation, and they have taken very few steps to address their current inefficient, manual processes.
Table 1
Heavy Check Users Posses Unique Characteristics
| Organizations’ Payment Method Characteristics | Heavy Check Users | Remainder of Respondents |
| Under $100 million in annual revenue | 64% | 29% |
| Make less than 50,000 payments to suppliers annually | 62% | 31% |
| Have not addressed check usage in the past two years | 56% | 17% |
| Favor paper checks | 53% | 17% |
| Say that many of their suppliers specifically request check payments | 49% | 15% |
| Currently have a p-card program | 47% | 53% |
| Cite high processing costs among their greatest payment challenges | 44% | 27% |
| Have taken actions to decrease checks in past two years | 40% | 81% |
Changing existing procedures can be difficult, especially for smaller organizations with fewer resources. Certain ePayments tools, like virtual card accounts, are relatively new technologies, and with that newness comes wariness from organizations: letting go of comfortable methods in exchange for unknown software can be a daunting prospect for any business leader. Many fear that electronic tools will not function as well as their current methods. However, virtual cards can operate much like existing processes in terms of security and control, and they bring even more efficiency.
CSI globalVCard, a provider of virtual card account solutions, works to eradicate organizations’ concerns over payment automation with a safe and efficient virtual card tool. Virtual cards, also called single-use cards, generate a unique credit card number to settle a specific transaction. The solution operates similarly to a check in that once the transaction is complete, the virtual card number becomes invalid. Virtual card payments are issued through the web or from a mobile device and are processed just like traditional credit card payments.
The globalVCard virtual card payment system is integrated with a customer’s ERP or accounting system for simplified reconciliation and full visibility. It increases control and security by giving users the ability to authorize or block payments at anytime. In addition, the globalVCard system offers customers monthly cash back rewards based on the virtual card spend volume, enabling organizations to turn overhead departments in to revenue generating departments.
CSI globalVCard customers attest to the ability to bring more security and cost control than checks, and they consistently gain substantial ROI in a number of areas. Implementation benefits include:
- Paper and Cost Reduction: The globalVCard payment system reduces the paper trail and associated costs of paper checks: organizations no longer have to pay for paper, printing, postage, and other check-related costs, decreasing the company pay out. This cost reduction is even more valuable when paired with monthly payment rebates.
- Stronger Security: Organizations can more easily track vendor and payment information with the globalVCard system, and internal auditors report more efficiency and security in their auditing tasks.
- A Strategic Workforce: With an electronic payment system, organizations gain more value from their employees—many of CSI’s customers have been able to strategically reallocate a large percentage of their finance staff to more useful activities. Payment automation allows a company’s staff to work smarter instead of harder.
- Improved Vendor Relationships: globalVCard enables organizations to customize their payment schedules—they can even time their payments to vendors within the half hour. This greatly strengthens buyer and vendor relationships.
CSI built their globalVCard solution in response to organizations that had grown too comfortable in the familiarity of their check-based payment system. While they have confidence in their solution, CSI recognizes that moving beyond checks to an electronic process takes trust—both in the technology and the solution provider. They strive to build and maintain that trust by offering an ePayments tool that is virtually effortless to implement, and that offers benefits of efficiency and security beyond what manual systems can possibly offer.
To learn more about making the transition from manual to electronic payments, register for our free web clinic, Transitioning to ePayments: Real World Success Stories. Sign up now and even if you’re not available to attend the live event, you will be notified when it’s available on-demand.
