Improving Accounts Receivable by Providing More Options for Payment

 

Frequently we are asked by prospective clients, “How will I be able to get all my customers to use an online portal?" Currently, they use an EDI (Electronic Deposit Interface) shown as CTX below or process paper checks either through their bank's Lock Box/Drop Box (shown as ARC below) or manually in their office and many use automated "AP tools“. If you are still holding out for the idea that the ultimate direction of good Accounts Receivable is to get all your customers to use one “best” method of payment you have it all wrong.
Contrary to many peoples' belief there is no “best” automobile, accounting software, soft drink, or way to make a payment to Accounts Receivable. The “best” solution is one that provides options. You need to keep in mind that your customers are a diverse lot, much like consumers shopping for toothpaste and cars, consumers want options because their needs are not like everyone else’s.
Undoubtedly many payments will still be going to AR departments across the country years from now in little white envelopes with a piece of paper inside with routing number and account number and amount typeset onto it. Paper checks are not going to disappear today or tomorrow. EDI will probably retain some of the small inroads it has made into AR despite its inflexibility and hassle to setup. The growing trend in payments though is online ACH check payment. One of the reasons for this is that online payments delivered via ACH are much less expensive than credit card payments. Another reason for the rise in online ACH is that unlike EDI an ACH online payment is flexible and as easy to set up as writing a paper check, and can be made as a one-time payment or a recurring payment set to recur and expire according to custom options made available with a system similar to that offered by Upsilon Payments. And last but not least online ACH payments can be associated with custom software that provides a rapid view for the payer into their payment history, payment communications, payment frequency, invoices related to the payments, and other customized options specific to different industries and business models.
The recent statistics below compiled by NACHA show the rise of online ACH (WEB) and reveal it’s soon to be ascendency over drop box and other payment methods. We think this shows clearly that not providing online ACH as another payment option to your customers because of fear that it will not be adopted is clearly unfounded as a rapidly growing segment of Accounts Payable are utilizing online ACH as a primary payment method. Online ACH software is able to integrate with AP automation tools and augment them, not replacing or detracting from them.
Online ACH should not be viewed as a final one fit solution for all your customers; it should be viewed as a necessarily affordable piece of your AR systems that caters to the tastes of a growing number of payers.

 

Staff at Upsilon PaymentsJonathan Ranes

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