Moving to e-payments: Best practices for US middle market companies Part II — Collections

Abstract

This is the second in a two-part series on moving to electronic payments. The first (published in Journal of Payments Strategy & Systems, Vol. 3, No. 1) covered the issue from the perspective of the payer. This paper is directed to the receiver of the payments. When tasked with optimising liquidity and minimising associated risks (such as liquidity shortfalls), for example, the length of time it takes to collect an organisation’s receivables, has significant impact — especially in the current economic environment. If a company is primarily collecting payments by cheque, it is almost certainly paying more than if it could move these payments to an electronic alternative. Monetary savings, reduced administration, greater transparency, compliance and data aggregation are just a few of the proven advantages that result from a shift to electronic payment formats. Payment methods may vary by industry and company size, but all companies should consider plans to migrate to electronic payments.