Blasting through the top 6 e-pay barriers

You know why making and receiving e-payments is a good idea: less paper, better revenue management, streamlined processes, fewer errors, etc. So what’s really standing in the way? And is it a good enough excuse?

So you’re probably not going to achieve a “paperless payables” or receivables process anytime soon. That doesn’t mean there aren’t a lot of benefits for making as many payments as possible via automated clearinghouse (ACH), wire transfer or purchasing card.

Trouble is there’s a whole laundry list of barriers to companies jumping on the e-pay bandwagon — some legit, some not.

Recent data from the Association for Financial Professionals (AFP) can help you determine which is which so you’re not being deprived of a whole host of potential benefits for no good reason.  They tracked the most common barriers to e-payments facing companies today.

Of course you need to know what your own organization is up against, resistance-wise. Your best first move: Survey your vendors to gauge their interest in receiving electronic payments and ask customers how they’d feel about paying you that way in return.

Then brace for the flurry of excuses. You may even hear some of these within your own organization.

Based on what you hear, here’s an idea what you can knock out immediately and where you may have to make more of a convincing case:

Excuse #1: “We don’t want to lose any check float.” Let these folks know: They already have. After Check 21 went into effect, you bank is processing payments electronically even if you’re paying with paper. The float game isn’t what it used to be.

Excuse #2: “Senior management isn’t convinced of the business case to go electronic.” This may have flown a decade ago, but no longer. Now all companies of all sizes understand the value of this top tech best practice.

Excuse #3: “We can’t send or receive automated remittance info.”  This is another one that’s easy to knock out. There are any number of ways around this. Companies can even send remittance info via e-mail. Not 100% efficient, but it still takes the paper out of the process.

So those were the excuses you can work around pretty easily.  If you hear any of the following, however, prepare to work a little harder to overcome them:

Excuse #4: “Customers just don’t want to pay electronically.”   You’ve got to be ready to present what’s in it for them: how they’ll streamline, save money, etc. Providing examples of similarly situated companies that have had success with e-payments can also go a long way.

Excuse #5: “We don’t have the IT resources to devote.”  This may be a more common problem these days, especially as companies try to tighten up. IT usually gets some of the greatest scrutiny.  But you can also turn that into an opportunity. As times get tight, the IT projects that do survive are usually those that streamline and increase the efficiency of the organization – electronic payments certainly fit that bill.

Excuse #6: “Our electronic payment and accounting systems aren’t integrated.”  This problem will undercut much of the efficiency of electronic payments. But there are some scenarios that are better than others, according to the AFP:

• Go with ACH over payment cards. Organizations are more likely to integrate their ACH systems (59%) with their accounting setups than with p-card programs (40%).
• Start in A/P. It’s better to give than receive when it comes to hooking up your systems – 50% of organizations have integrated their A/P systems with their e-pay system, while just 32% have with their A/R systems.