6 Benefits of Online Bill Pay for Vendors | Plate IQ
by Maddy Osman
Whether the vendor serving your business is a small operation or a huge corporation, paper statements and payments can be a hassle to manage.
For small vendors, sparing the time to track, match, and hunt down payments in the mail can be costly. The scale of larger businesses means they receive a significant volume of payments that require extensive systems to manage.
For any type of vendor, the benefits of online bill pay can be huge for their business.
That’s part of the reason why the transactional value of digital payments is expected to grow 12.24% each year until 2025. Vendors are realizing that streamlining payments saves money, makes their processes more efficient, and makes their customers happier.
Keep reading to learn more about the benefits of online bill pay for vendors.
Benefits Of Online Bill Pay
1. Easier payment tracking
2. Faster payments
3. Digital records
4. Automated collection
5. Better customer service
6. Greater peace of mind
1. Easier Payment Tracking
For your business it’s vital to know the status of your payments, so you can ensure they’re going through and when to expect the funds to be withdrawn. For your vendors, it’s also critical to know when to expect incoming payments. That helps them balance accounts, manage assets, and allocate resources.
Tracking and anticipating incoming payments manually can be time-consuming, difficult, and easy to miscalculate. Traditional money management needs someone to account for the upcoming payments in their accounting software, then cross checking and updating the information each time a payment becomes overdue.
One of the main benefits of online bill pay is being able to track upcoming payments effortlessly. With an online vendor payment service like VendorPay, vendors can see when each invoice they send to customers is due, with recurring invoices auto-populating. That means there’s less worry, and planning is easier for vendors with more reliable B2B payments.
2. Faster Payments
At any given time, nearly 39% of invoices are overdue. That means a vendor expecting 250 payments at the end of the month can also expect 97 of them to be late. Not just a few days past their due date, either — but an average of 23 days late. That can seriously tie up resources for a small to mid-sized company.
The late payments aren’t always due to a lack of funds. Sage found that 34% of invoice payers had no reason to pay late at all. That means that, along with delayed mail, customers often simply forget to pay invoices or avoid paying them out of inconvenience.
With online vendor payment, a paper check can’t get delayed at the post office, and automatic payments can be scheduled, so the vendor doesn’t have to rely on a forgetful associate. The entire process of paying vendor invoices is quicker and less painful for customers, ensuring vendors receive payments on-time more often.
The convenience and simplicity of online banking is one reason why vendors in Plate IQ’s VendorPay network shorten Days Sales Outstanding by 25%.
3. Digital Records
Along with being able to see upcoming payments, another benefit of online bill pay is the ability to see past payments.
The vendor’s accounts receivable department is responsible for conducting account reconciliations, maintaining account records, and resolving discrepancies.
The benefit of electronic bills is that there’s an automatic paper trail of every payment. With an automated bill pay service like Plate IQ, vendors can sort payment history by transaction and customer.
4. Automated Collection
The time of actually receiving, matching to an invoice, and recording payment can be extensive for vendors. Without online payments, vendors may have to receive payment over the phone, with cash passed through sales reps, or through checks sent in the mail. In some cases, checks arrive much later than expected, or not at all.
When accounts receivable gets a check for an invoice, someone has to manually record the payment, date, and check number in their accounting software and manually associate the payment with the invoice it’s fulfilling. Not to mention the added time and expense of paper bills.
In some cases, someone must also personally drop off checks at the bank, while in other cases, they can be processed remotely in bulk by their financial institution.
Automated payments that sync with accounting software like QuickBooks save a huge amount of time and expense. Additionally, vendors can save time collecting recurring payments by setting up automatic reminders for their clients, so they can focus more on running their business.
In a consumer study, Visa found that processing digital payments is 57% less expensive than traditional payment methods when considering fees and labor costs. All told, the ability to receive payments automatically is a tremendous benefit of online bill pay for vendors.
5. Better Customer Service
Vendors ultimately want to make business decisions that will please their customers. That ensures they continue to grow as a business and retain current clients. Simply put, people usually prefer to pay digitally instead of writing checks.
This is beneficial for the vendor too. When their customers have the tools they need to access their own digital records, they have fewer invoice and payment-related questions for the vendor.
Since the pandemic, consumers are moving ever more rapidly towards electronic payments. According to a study by FIS, the use of digital wallets, often used by mobile apps, is up 23.7% since 2019.
Offering online bill pay service means vendors can work with a larger variety of clients, who can more easily customize their payment methods. That personalized experience means clients can pay with any card, bank account, savings account, or checking account they choose.
Clients also prefer online payments because it makes it easier to pay on time and avoid late fees. There’s no need to fill out their checkbook or go to a credit union or ATM to secure cash. In some cases, clients can even manage payments from their phones through mobile banking.
6. Greater Peace of Mind
Online payments also offer vendors several assurances.
For one, traditional checks can bounce, even once received. That extends the time it takes to get payment and could incur processing fees. Digital payments are verified and processed immediately, providing greater security to the biller that their money is actually on the way. It’s a much more reliable way to accept payments.
Digital payments can also offer multiple levels of security measures. Credit cards and debit cards are encrypted against identity theft, which gives customers’ account numbers security and ensures vendors can quickly and safely receive payment.
Plate IQ’s vCards can be issued as single-use cards, effectively securing one-time payments against theft or misuse.
Final Thoughts: 6 Benefits of Online Bill Pay for Vendors
The many benefits of online bill payment for vendors and customers mean that traditional payment processes are rapidly evolving
For vendors, accepting online payments means they can receive their payments faster, track payments easily, manage record-keeping efficiently, spend less time accounting payments, and provide a higher level of service to their customers.
To simplify your vendor payments, request a demo of Plate IQ’s VendorPay today.
Maddy Osman is a writer and entrepreneur who writes about B2B technology at The Blogsmith, a research and content agency. To learn more, visit TheBlogsmith.com.
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