If your customers’ only option to pay is via check, then you are delaying payments unnecessarily and reducing the velocity of cash flow. Payments via check can delay payments for weeks, increasing borrowing costs and reducing profits and shareholder value.
Delays caused by payment via check include:
- Processing and cutting checks – Some AP departments only process checks once a week, biweekly or monthly. If you miss the cutoff for a check run, your payment will be delayed further. The new normal and the need to work remote can add additional complications and delays to processing checks.
- Postal bottlenecks – In normal times mailing a check can add a week or more to payment delays. The new normal has created additional bottlenecks in major postal processing centers which have added further delays in delivering checks.
- Processing checks received – Manual processing of checks received and posting cash can add several days or more to payment delays depending on when checks are received. Checks received just before weekends or holidays sit unprocessed while your office is closed. Further delays have been created by COVID-19 lockdowns and the necessity to work remote.
Payment delays caused by only offering your customers the option to pay by check can be eliminated by implementing automated accounts receivable solutions.
Providing an online portal for customers to use to make payments will eliminate delays caused by payments via paper checks. Online portals have a number of features which make them an ideal solution for customers and your company including:
- Self-Service – Customers can make payments, manage their profiles, and obtain copies of documents, check information and report disputes.
- Magic Link – A secure password-less authorization system that lets you generate URL’s to sign customers into your portal. Customers just click on the Magic Link!
- Multiple Payment Options – You can offer payment by ACH and credit card, and provide for recurring payments to make it easy to pay.
- Cloud Based – Access from anywhere at any time facilitates remote work when it is needed.
An online portal gives your customers the convenience and flexibility of self-service and eliminates delays caused by payment via paper checks.
AR and AP issues are easier to deal with if you have automated systems. Cloud-based AR and AP solutions with self-service portals and automated processes keep vendors and customers connected no matter where they are located.
Automation can help to reduce or eliminate the reasons for getting paid late. Automation makes this possible by eliminating or reducing the road blocks and delays that can cause late payments. Automation increases efficiency, reduces costs and results in increased profits, cash flow and shareholder value.
Lockstep Collect, a leader in cloud-based credit and collection platforms, can help you collect cash in 4 ways:
- Cloud-based solutions
- Automated customer communications
- Customer self-service
- Collections Activity Management
Lockstep Collect is an experienced software partner that can help you maximize your collections and cash flow in the new normal.
If you would like to learn more about how you can benefit from AR automation, and improve cash flow 31% or more take our AR Automation Product Tour.