For customers paper checks have become increasingly unpopular as a means of payment because of the time and cost to process, and the inconvenience of not being able to pay bills from anywhere or at any time.
For suppliers paper checks cause payment delays and are expensive to process
The state of paper checks in the new normal has become even more troublesome for both customers and suppliers.
Delays of unusually long periods of time are becoming common in the new normal for payments by paper check. Post offices are behind in deliveries.
- There is anecdotal evidence that snail mail is as much as two weeks behind in some areas.
- Customers are also behind because they can’t get people into the office or limited staffing can’t keep up.
This all adds up to delays in payment up to or beyond a month. Suppliers aren’t happy because cash flow is delayed, and customers are upset because late payments can result in credit hold and strained relationships with suppliers.
Many people are working remotely in the new normal. Offices for non-essential businesses are closed. Paper checks are a problem for customers and suppliers under these circumstances.
- Suppliers need a digital mailroom to receive paper checks. Instead of collecting accounts receivable, time has to be spent processing checks and applying cash. Cash flow is impacted and customer accounts are not kept up to date.
- Customers have to manage the physical processing and mailing of checks of checks and entries in their accounting systems. It can be a real challenge to remain current with suppliers if receiving and vouching transactions are not up to date.
The problems created by paper checks in the new normal will hasten the conversion to 100% digital collections.
With 100% online collections and cloud-based credit and collection platforms, your AR team can access up-to-date customer account information from any location. Their time can be spent contacting customers to collect accounts receivable and increase cash flow instead of processing paper checks and applying cash.
Customers also benefit from digital collections in a number of ways:
- Convenience – pay bills from anywhere at any time
- Lower cost – save on processing and mailing checks
- Reduced delays – faster update of account balances with suppliers
Moving collections online to get around the problems caused by paper checks in the new normal is the direction many companies will take. Cloud-based credit and collection platforms provide the solutions you need to maximize the benefits of online collections.
Lockstep Collect is a market leader in cloud-based credit and collection platforms. Lockstep Collect can help you to take full advantage of online collections.
If you would like to learn how you can benefit from online collections, please contact Lockstep Collect at www.lockstep.io.