This time loss could translate into a loss in capital which can easily exceed a digital processing fee. Using legacy accounting processes such as mailing physical checks may avoid the costs of digital payments, but you should consider the time it takes to process the checks, which can take anywhere from days to weeks. All of the transactions can be viewed on their dashboard, which enables easy reconciliation.Ģ) Use digital payments, and encourage your supply chain to do the same Businesses can set up a digital wallet to make and receive payments, as well as access Pay-it-Later services. Over 40% of main street businesses surveyed by PYMNTS said that implementing an all-in-one payment platform simplified their receivables tracking, and 32% said the technology had led to improvements in working capital.īlueX Pay, for example, offers a payment platform that amplifies cash flow for buyers and sellers. All-in-one payment platforms offer a remedy to this scenario by bringing all of these processes – such as expenses, payroll, and revenue management – under one digital dashboard.
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A recent PYMNTS report found that over 50% of US CFOs surveyed say that digitizing their AP / AR operations has allowed for an increase in payment types such as ACH payments, credit cards, wires, and real-time payments (RTP), among others.Įfficiency and transparency in AP / AR processes are essential to cash flow management, which is why relying on manual operations can result in wasted resources. There is an undisputed correlation between modernizing AP / AR processes and overall business growth. However, some supply chain partners may be open to accepting net 15 or net 20 payment terms. The payment terms in most industries are generally net 30, which means that payments that are as little as a day late can have a major impact on expenses on a fixed schedule like rent or payroll. Another benefit is that receiving payments early contributes to lower days sales outstanding (DSO) metrics, which can enhance your company’s overall financial health rating.Ģ) Negotiating with suppliers on payment due dates Have you considered offering incentives for your clients to pay their invoices earlier? An early payment discount (EPD) can range from 1 to 2%, but a small loss in revenue might be worth getting fast access to cash that can be put towards urgent business needs, such as payroll or rent. Here are a few areas you can explore with them: While some contracts are fixed in stone, customers and suppliers are still human beings who may be flexible and open to discussion with regard to the timing on payments. Find ways to negotiate with customers and suppliers
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