Expedite Your Receivables

What would it mean if your company could remove the cost of manually processing customer payments? Consider the benefits to your accounts receivable department if your employees didn't have to open the envelopes and handle checks and payment coupons.

Without these tasks, you could also save on:

Processing float, which is the delay between the time your company receives the payment and the time you deposit it into a checking account.

Availability float, which is the delay between the time a check is deposited and the time your company's account is credited with collected funds.

According to the National Automated Clearing House Association, more than half of all U.S. households pay at least one bill per month with direct payment and most of those surveyed say they would like to pay more bills this way. Four of five say they are very satisfied with the direct payment process.

You can save all these costs by using "direct payment," or the electronic collection of payments in a process set up by your financial institution.

How it works: Customers' accounts are charged automatically on an agreed-upon date and a deposit is made to your company's bank account. (Direct payment can also be used to transfer money from an account at one bank to an account at another bank anywhere in the country.)

Take a look atsome of the benefits. Your company can:

Reduce costs. Paper-based payment

transactions are costly in part due to manual processing. Checks require that invoices and return payment coupons be printed, inserted into envelopes and mailed. Your company must then receive and deposit the checks. Checks are prone to high levels of errors by customers and employees, which can cause delays in collecting your money. For example, customers may neglect to sign the checks. Electronic processing removes much of the "human error."

Improve cash flow. With direct payment, your company has control over cash flow from customer payments. Your corporate cash managers can know the value of the payments collected on a given date. The "when and how much" part of accounts receivable becomes certain.

Reduce delinquencies. Recurring bills are paid on time and late payments are significantly reduced. Companies report lower return item rates for direct payments than for checks. It's the exception when direct payments are returned unpaid on the first submission.

Provide a free service for customers. By offering direct payment, you can capitalize on the goodwill generated by a free, convenient, reliable, and safe payment service. Your customers don't have to pay postage and they can be certain that bills will be paid even when they're out of town. Direct payment eliminates late charges, as long as the customer has money in the account to cover the payment.

Customer acceptance of direct payments is rated as very good to excellent. It's a win-win situation for both parties.