Frustrated with the cost and inefficiencies of writing cheques to vendors and staff? You’re not alone — as digital payment technology improves and goes increasingly mainstream more business owners are saying goodbye to cheques. According to the U.S. Federal Reserve, in 2018 automated clearing house (ACH) transactions exceeded the number of cheque payments (16.6 billion vs. 14.5 billion) for the first time, while ACH payments have grown by 6% every year between 2015 and 2018.
It’s clear the tide toward digital payments is turning, which means now’s the time for you to get rid of cheques and go virtual. Before you ditch paper, though, you need to think carefully about how best to digitize your payment-related functions. Here are some ideas.
Update Your Finance Software
A good enterprise resource planning (ERP) system can up your game substantially by automating a variety of finance-related tasks, including budgeting, reporting, inventory management and more. Digital payments are usually part of that system, too. The right solution will allow you to more easily see when a payment has been cashed or if a foreign transaction is caught up somewhere overseas, it can also make it much easier to pay multiple vendors at once and it will let you know immediately if a payment doesn’t go through, which is helpful for managing cash flow.
ERP systems also collect copious amounts of data, and can connect with other software solutions, like customer relationship management programs, which can then give you more insight into your business and your clients than a cheque — which yields no data — can. If you already use an ERP system, look into how it can connect with the other software platforms you use, to simplify your processes.
Work With A FinTech
Making the jump to digital can be a daunting task, especially if your bank’s systems don’t connect to your ERP properly — and many don’t. There are a number of FinTechs out there, though, such as FISPAN, that ensure that your bank’s programs properly talk to your company’s software. Its cloud-based solutions and APIs give your business more digital functionality than if it tried to deal with the bank itself. With FISPAN, you can automate payment reconciliation, make batch payments, manage foreign currency, generate data and more.
Engage Your Bank
Some banks are already working with FinTechs to make digital payments easier. FISPAN, for instance, is being used by a number of financial institutions across the globe. Many people, though, don’t know what tech tools their bank offers. Call up your banker and ask them what digital payment technology they’re using. See if they are working with a FinTech in this area already, and if not, ask them to look into working with one. Don’t be shy; it’s your business, after all.
Get Your Vendors On Board
Too many businesses are still using cheques. In fact, it’s been reported that roughly half of the small businesses in the U.S. still regularly use cheques, while the Canadian Federation of Independent Business suggests that it’s not much different in Canada.
Talk to your vendors about how using cheques may be hurting their business. Tell them you’d like to transact with them digitally. Outline the pros and cons, lay out the best practices, and show them the best ways to connect their ERPs to their bank and how to accept payments from you. They may already be thinking about doing away with cheques and just need a little push.
With the business world going more digital, accepting virtual payments is not an if, but a when. Talk to your bank and ensure you have the right software in place and you’ll be able to do away with cheques in no time. Read our whitepaper to find out more about what you can do to go digital.