Businesses and their advisors have long been moving toward more automation and greater control over business finances.The reasons have been purely pragmatic and productivity-focused: Automation simply reduces the amount of tedious, routine work that has to be manually processed by staff, which reduces cost and error, which also frees staff to spend their time on more profitable channels.
There are literally thousands of articles about the different processes that businesses can automate: From customer service, to sales leads, workflow, shipping, sales taxes, reporting, inventory management, business communication, and recurring billing.
Prior to 2020, businesses were also making progress in automation of receivables, with more technologies making it easier for customers, including B2B customers, to pay their bills electronically. After all, what area of the business provides such visible ROI than speeding up the average payment time from customers? With revenue coming in more quickly, less time is wasted managing AR and the funds are in the businesses coffers sooner. Payments are also automated and less prone to error for the same reasons that automation helps other areas: less hands-on manual processing of payments by customers and by business staff.
In the year 2020, and beyond, we’ve suddenly learned that dispersed staff can still be effective and productive, but the processing of checks (both issuing them and receiving them) has been made much more difficult. If most AR staff are working from home, how do checks mailed to the business office get processed? For customers, if their payables bookkeeper is working from home, do they have access to check-printing technologies?
Businesses that had already transitioned to accepting online payments via ACH or credit card had a significant advantage, as they could transition check-paying customers to a better method. Of course, there are many other reasons that businesses should move their clients to electronic payments, and they’ve existed since far before the year 2020. Starting with the movie “Catch Me If You Can,” we can see how simple it used to be to forge checks.
While many improvements have been made to the old-fashioned payment method, checks are still prone to more fraud than electronic payments, putting both the payee and payer at risk. Checks can be stolen from the mail, altered to pay the wrong amount or wrong person, printed with false account numbers, or otherwise manipulated. No wonder even Experian recommends that people are safer when submitting payments electronically.
How to Get Started Accepting Electronic Payments
As noted previously, accepting electronic payments can make AR a much smoother process for businesses than accepting checks, and greatly reduces the threat of fraud. But with all new technologies, there is always a risk. Therefore, it’s important to take a few steps to ensure that the business safeguards against these threats.
Choose the Right ACH Partner
Whether yours is an accounting, legal, architecture or other professional services firm, the ACH system you use should integrate tightly with the billing and accounting system. This is important not only for streamlining the workflow, but also for ensuring controls and security are maintained during the payment process. Practice managements solutions like BQE Core now offer integrated ACH payment capabilities, through integration with AffiniPay, that offer many benefits, including:
- Convenient payment options through online credit, debit card and eCheck/ACH processing
- Ease of invoicing with custom payment links to add to emails and websites
- Access to payment plan options through scheduled/recurring payments
- Speed of invoicing through Quick Bills generated in seconds
- Compliance and security with advanced data protection and technology standard
Monitor ACH Processes
Just as we now often rely on multi-factor authentication when logging in to many of our necessary technologies, any significant changes to a customer account should require two-person approval for the change. This is a matter of addressing internal risks caused by inexperienced, inattentive or theft-focused staff. Most importantly, two-person approvals should include:
- Changes to routing numbers and bank accounts
- Changes to authorized business contacts
- Setting up any new payment recipients/vendors/customers.
Keep Information Secure
To address external risks, consider where outside parties might gain access. The most common is by phishing emails and bogus phone calls from outside parties pretending to be the client and trying to change routing and account information so that they receive the payment. The second of these can be managed by following the same multi-person approval system noted above. The first, however, requires reminding staff of the importance of security when it comes to email or giving out information on the phone.
ACH systems with proper controls should be used, with portals and secure login processes, which eliminates the need for emails with any banking information. Phishing is the leading risk for ACH fraud, so be vigilant with client information, both incoming and outgoing. Likewise, payee/payer information should never be stored on a spreadsheet.
As this article notes, ACH fraud is rarer than check fraud, but there are some common fraud types to be prepared for. The leading ACH payment automation providers, like the AffiniPay system that BQE Core uses, makes
The Difference Between Accepting Payment via ACH and Credit Cards
Online payment systems often allow payment via either ACH or credit card. The primary difference in these is that ACH transactions generally have a nominal fee, but the business accepting payments assumes the risk of fraud. With credit card and debit card transactions, the payment service provider or the credit card issuer assume most of the risk, but there is a fee (up to 3%), which can be shifted to the payer or payee, as determined by the business.
It's Time for Electronic Payments
Before Covid, about 30% of those surveyed said they used online payment systems. Since Covid, that number has skyrocketed, with 58% now saying they are more likely to use electronic payments. And up to 70% of customers pay their invoices (or schedule them to be paid) within 24 hours of receiving it, when there is an electronic payment option.