What You Need to Know About Automating Your Check Paymentsby Dorano V. Professional PR since 2010
Regardless of the industry that your business is currently operating in, one of the most important things for you to do is pay your employees and vendors in full and on time. Without making sure that these parties are reliably receiving their payments, you may have difficulty retaining your employees and even run into various legal issues down the road.
The importance of having a reliable payment system is truly undeniable. However, as we move further into the information era, businesses of all varieties are discovering they have more options available than ever before. With each passing year, an increasing number of businesses have moved away from traditional paper checks and towards a system that is better suited for the 21st Century.
In this article, we will take a brief look at the most important things to know about automating check payments and how an automated system can immediately begin to improve the way that your business operates. Converting from paper checks to an automated check payment system will require you to make several very important decisions, but, with the right information in hand, you can immediately begin to make the changes you need.
Increasing Payment Flexibility
The most obvious reason your business may want to consider converting to an automatic check issuing system is that—contrary to when you only used the old-fashioned method—an automatic system affords you a greater degree of flexibility. Because most automatic payment systems will still allow you to have a choice whether payments are made electronically or with paper checks, your employees (and other accounts payable) will be able to find a system that works for them.
One of the problems that many businesses come across is that, with numerous different sources of cash flows, it can be difficult to coordinate where capital needs to be. For example, the existence of “check run days,” “wire days,” and various other causes of lapsed payment can cause your business to experience a potential cash flow crisis. Having a coordinated system that effectively blends multiple different payment methods may require the use of a specialized automated check payment services, but will ultimately be the most beneficial in the long-run.
Accelerating the Approval Process
In the spirit of consistency, many businesses require multiple signatures before a paycheck can be formally approved. Though this metric may help with certain security measures (or help a business avoid mistakes), it can often be quite a hassle when certain situations arise. For example, if several of the primary signatories are out of town on business, there may be a delay in when paper checks can be issues. Considering that your employees may have bills due in the next few days, delayed payments are something that should always be avoided.
Fortunately, the check automation process has made it significantly easier for checks to be approved. Even if the primary signatories are not in town to physically sign paper checks, this task is still something that can be easily managed from afar. Whether you are paying your suppliers, your employees, or anyone else, being able to quickly manage your accounts payable at all times is undeniably a valuable thing.
Knowing Exactly Where Your Money Is
Another benefit of using an automatic check payment system is that—contrary to the delayed methods of the past—it is now significantly more possible for businesses to track financial information. Being able to keep track of where your capital has been distributed, the stage of the distribution process it is currently undergoing, and how much outstanding cash flow you currently possess will make it much easier for your business to make important financial decisions.
Having the ability to know where your money is can also help clarify and resolve any disputes that you have with employees or vendors. For example, if a vendor has complained that they haven’t received payment, you can quickly identify whether or not that payment is actually on its way over. This same issue may commonly occur with employees (especially employees earning hourly wages that vary from week to week).
Keeping Up With Regular Financial Obligations
There are some payments that will vary over time, but there are other payments that will be much more predictable. Another benefit of utilizing an automatic payment system is that—contrary to when you are using paper checks—you no longer need to worry about making your recurring payments manually.
Things such as regular insurance, rent, level utility bills, and various other financial obligations can be easily managed through the efficient use of an automatic payment system. However, even if some of these expenses do vary to a certain extent, the use of an automatic system may still be a viable option. Some businesses may even choose to use an automatic system for paying salaried employees, though this may create certain complications if done incorrectly.
Simplifying Audits and Reports
When your business is entirely dependent on the use of paper checks, every transaction that you make will require the recording of several different actions. When it comes time for your business to organize all of your end of year financial reports—or even worse, you may be audited by the IRS—having to track each individual paper record is not only something that is incredibly painful, it also increases your probability of creating various accounting errors.
Fortunately, an electronic system makes it much easier for you to create multiple cash flow records at once and to also do so in a way that assures consistency throughout the entire process. Whether you need to create financial reports for the sake of your own record keeping, for the sake of potential investors, or for the sake of the IRS, having an electronic record will make it much easier to follow the movement of capital throughout the year.
How Can I Find a Payment Automation Service that will Work for My Business?
Unsurprisingly, an increasing number of businesses have begun to specialize in helping their clients automate their payment processing systems. Many of these businesses are highly qualified and have earned a strong reputation for their work. However, with so many different options to choose from, it can be difficult to know how to narrow your search.
● How can your business help me create an automatic payment processing system?
● Will you be able to help me integrate both paper and electronic checking?
● What are the most valuable features of your automatic checking systems?
● Why should we choose you to help our business become more automated?
By taking the time to ask your prospective business partners these valuable questions, you should be able to significantly narrow what is an otherwise relatively crowded industry.
In the world of business, change and automation are both two seemingly inevitable trends. Naturally, making payments to both your employees and your vendors are necessary tasks that can be automated more effectively than ever before. By taking the time to understand the benefits of the automation process, your business can immediately begin to establish a competitive advantage. Furthermore, by making an effort to compare the different options you have available, you should be able to find a business partner that can effectively address your specific set of needs.
Created on Nov 17th 2018 16:01. Viewed 705 times.