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Digital Payments: How They Differ for Businesses and Why You Need to Know

Digital Payments: How They Differ for Businesses and Why You Need to Know

With individuals flocking to digital payments, why are companies clinging to paper checks and business check stock? For one thing, a company’s accounts payable and accounts receivable processes require far more oversight and coordination than a consumer-grade digital payment system can provide.

Consumers aren’t strangers to digital payments. Odds are you’re already paying routine household bills online or sending friends money via mobile apps. The attraction of digital consumer payments is their simplicity—digital payments are quick, easy, and possible from almost anywhere. If you owe money, you just click. If you’re the one owed, you do even less. The money simply appears in your account.

Understandably, businesses want those same conveniences when it comes to accounts payable processes. The problem, however, is that the business payment process isn’t that simple. Online payments for businesses are more than just transactions. They accompany a process that may involve layers of approvals, monitoring, and reconciliation. While epayments are far more convenient than traditional paper payments, they navigate a much more complex workflow than digital consumer payments.

That doesn’t mean, though, that businesses are out of luck when it comes to capitalizing on the conveniences of the digital era. Technologies such as online payment systems and AP automation are bringing consumer convenience to online payments for businesses. For this part of the Bill.com Digital Business Payments Series, we’re examining why businesses need a more robust payments system than those available for consumer payments, what features the business-focused solutions offer, and why they’re important.

Online Payment Systems for Businesses

As mentioned, consumers don’t need to route household bills to other family members to review or require compliance with preset guidelines as companies do. That’s why digital business payments systems are so important for companies. One of the main reasons they love digital business payments and features such as AP automation is that a burdensome and time-consuming process is streamlined to the point where bill payment seems effortless. Companies can take online payments, such as ACH transfers, eChecks, and EFT transactions, and combine them with a system that automatically ensures the proper review and approval processes are followed. In essence, AP automation guides a bill through the correct workflows, from the moment the bill is received to when the payment is reconciled in their bank and accounting systems, without extra data entry and with less effort and human errors.  

While the convenience alone may have you ready to switch to AP automation, the benefits don’t end there.

  • Document management: When you have a centralized repository for your AP-related information like contracts or statements of work, your business runs more smoothly. AP automation corrals and digitizes all your contracts, statements of work, quotes, invoices, and payment records in single place, rather than leaving them scattered across various filing cabinets, computers, personal drives, or cloud platforms.
  • Audit trails: The IRS requires you to keep at least three years’ worth of bill payment records. If you’re still using paper files, you know it is a headache. AP automation creates flawless audit trails for you right in your cloud-based account, so there’s no reason to sweat if the IRS comes calling. You can even give some users or auditors view-only access to make the process easier.
  • Staying in sync: Mistakes can sink a business. Few things are more dreaded than double data entry, because it inevitably leads to errors. With an AP automation system, you can directly integrate your digital business payment solutions with the accounting software of your choice, like QuickBooks, NetSuite, Sage Intacct, or Xero. That means only one entry across all systems, and far fewer mistakes.
  • International payments: Businesses are increasingly global, with expanding networks of overseas vendors. Traditionally, international payments involved expensive bank wire transfers that have the potential for costly errors, delays, and foreign exchange losses. AP automation removes those hurdles, quickly sending and tracking payments and allowing you to easily pay in local currencies.
  • Cash flow: Knowing where your cashflow stands at all times is crucial to understanding your overall financial health. Lots of moving parts can make it tricky to keep track, but not when you have AP automation. Consolidating bill payment into a single platform keeps your payments on schedule. Payments are deducted from your account either immediately upon sending or at a time you schedule. You aren’t forced to wait and guess when a check may clear. You always know your current cash flow position.
  • Security: Being a victim of fraud can quickly derail your business. When you use paper checks, fraud can be harder to prevent and take longer to detect. AP automation systems come with built-in protections like the ability to limit account access and payment approval permissions, encryption, Positive Pay, and other security measures that deter fraud.

If you’re still wishing that your digital business payments could be as easy as your consumer payments, it’s time to give AP automation a try. Sign up for a 30-day risk-free trial of Bill.com today to find out how you can simplify your digital business payments with AP automation.

In the next section of the Bill.com Digital Business Payments Series, we’ll hear from an accountant who shares why she requires her clients to use them. Subscribe to the Bill.com blog to be notified when it is live.

 

January 22, 2019
Henrique Ceribelli
VP of Product Management, Bill.com
Henrique joined Bill.com in 2007, leading key product innovations such as payables, receivables, and the integration with leading accounting providers. Henrique holds a MBA from UC Berkeley, and a BA and a MS in Computer Science from the University of Sao Paulo.