While most U.S. consumers have made the transition to digital for communication, scheduling and bill paying, in the enterprise paper checks are still the de facto standard for 50 percent or more of vendor payments.
ePayment in Procure-to-Pay operations seems like a no brainer just based on cost considerations alone. Companies and analyst firms have estimated the cost per paper check to be between $3 and $5, which includes check stock envelopes, printers, ink, postage, and mail processing, among others. Moreover, by continuing down the paper check path, companies are also missing improved process efficiency and cost savings that accompany ePayments.
As Karla Fride, CEO of Nvoicepay explains, there are six hidden costs that dramatically drive up the true cost of business check-writing.
Payment Errors: Mistakes happen but finding the errors, researching what went wrong, recognizing where the money is, and correcting these errors takes time and resources.
Paying Late: Working with paper slows down the accounts payable process, leading to late payment fees and interest costs. Paying late can also cost organizations in terms of souring relationships with vendors.
Time-to-Approval: Once an invoice has been approved, organizations must go through stacks of paper invoices and paper checks to compare them and then sign the check. This is tedious and time consuming, diverting time and energy that could be better spent on other, strategic activities.
Poor Visibility Can Cost You: Poor visibility into cash flow is a major impediment to enterprise finance but a lack of visibility can also contribute to miscalculations result in overdraft fees and returned check fees.
Paperwork Storage Space: Paper checks, paper invoices, paper check stock – it all adds up to a lot of paper that must be stored and/or archived. Some companies rent storage space which is an added cost. Also, don’t forget about cost for the time it takes to locate a check among a sea of boxes.
Human Resource Costs: As companies grows and process more checks, they must hire more staff to handle manual processing.
Ready to break away from legacy payment processing? Inspyrus offers Inspyrus Total Pay, which transforms 100 percent of the manual effort managing multiple invoice payment methods (including checks) into touchless electronic payments.