How Digital Payments Help You Get Paid Faster
When your customers pay by paper, your business pays the price.
Despite the plethora of digital payment options available (including ACH payments and eChecks), organizations that rely on paper invoicing and payments face a greater risk of operational impairment due to outstanding invoices.
A survey showed that late payments negatively impact 64% of small and mid-size businesses, with 70% of business owners unable to pay themselves and 23% unable to purchase equipment. The survey estimated that if SMBs were paid on time, owners would be able to pay themselves and invest an additional $31,000 back into their businesses.
Paper invoicing, checks and the payment pipeline
Your customers will have a hard time paying if they don’t get your invoice promptly and in a consumable format. Companies that rely on paper for invoicing and payment will inevitably add weeks—or months—to collecting payments.
Let’s look at invoicing. It’s a challenging process when it is confined to paper. In order to prepare each invoice, an employee normally must:
- Dig through paper files to ensure the right amount and remittance information appears on each invoice
- Populate the invoice with the correct data
- Print the invoice, address an envelope, stuff it, add a stamp, and then drop it in the mail.
Let’s estimate that each invoice takes 30 minutes to complete from creation through handing it off to USPS. If you have 100 invoices, it could take almost 50 hours of your employees’ time—and that’s just to get the invoice out the door.
What happens after it leaves your organization? The post office will take anywhere between 2-7 days to deliver your invoice. That brings the tally of time to 50 hours to get invoices created & mailed and another 3-4 days to get it in your customers’ hands.
And even though your customer now has the invoice, they can only pay in paper checks. You must wait for the customer to approve it and add it to the stack of bills awaiting checks. It’s “Waiting for Godot” without the existentialism.
It’s no wonder that this process can drag and slow payments inevitably occur. Imagine if you could eliminate this waiting in a fraction of the time! Well, that’s where digital invoicing and payments come in.
Accelerate invoicing and payments by moving online
How do online invoicing and payments allow companies to get paid faster?
Invoice delivery is instantaneous, for one. You cut out time needed to mail an invoice and receive it—which can add up to a week or more instantly. Payments are transferred directly from one bank account to another, completely eliminating the need to shuffle paper checks back and forth.
Digital payment solutions add valuable features that speed up the invoicing and payment processes exponentially. This includes:
- Automation – One click creates pre-populated invoices with remittance information, codes and more. An employee can review the invoice and then send it to the customer electronically. Have clients that pay a set amount every month? The solution can automatically send the invoice on a scheduled day. You don’t even have to create it—it’s taken care of.
- Recurring payments – The system allows your customers to select automatic payments. That means each month on a scheduled date, the payment lands directly into your company’s bank accounts.
- Multiple payment options – Now customers can select from a variety of digital payment options such as ACH pay, eChecks, credit cards and more. These payments are virtually instantaneous and not subject to the lengthy delays associated with paper invoicing and checks.
- Overdue reminders – If your customer is late to pay, the digital payment solution will send an automatic reminder for payment.
- Self-service – The solution will host invoices online so customers can acces, review or even download current and past invoices.
As an additional bonus, digital invoicing and payments cost much less than paper check payments. You eliminate hours of work and the costs of supplies associated with sending the invoice.
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