From Checks to Clicks: How Electronic Payment Methods Benefit Suppliers and Boost Efficiency
If you still pay Suppliers with paper checks or accept them as payment via the mail, now is a better time than ever to reconsider this increasingly risky practice. Although the use of paper checks has been declining for decades, the number of reports of criminals targeting postal collection mailboxes to commit check fraud has grown exponentially. The U.S. Postal Inspection Service received more than 299,000 complaints of mail theft from March 2020 through February 2021, a 161% increase from a year earlier1. Moreover, checks can simply get lost in the mail or delayed, which can also cause a hit to your reputation and cash flow.
Investing in electronic billing and the right construction payment software helps eliminate these risks. Making this transition provides invaluable benefits—from increased peace of mind and a healthier cash flow—to protecting your reputation and providing great customer service to your Suppliers.
The Risks of Check Payments
According to a recent alert from the Financial Crimes Enforcement Network (FinCEN), in 2022, check fraud filed by banks nearly doubled to 680,000, from 350,000 the prior year2. In fact, postal inspectors recover more than $1 billion in counterfeit checks and money orders every year.3
Check washing scams involve changing the payee names and usually the dollar amounts on checks and fraudulently depositing them. This practice has evolved from small-time criminals pilfering a check or two from residential mailboxes to more organized efforts involving major theft from postal collection boxes4. Criminals sell copies of washed checks online, as well as stolen or counterfeit master keys (known as arrow keys) that open postal collection boxes. Even more disconcerting, postal employees have been robbed at gunpoint in major cities including Chicago for this nefarious purpose, and sometimes entire postal trucks are stolen with their contents.
Advantages of Electronic Payment Methods
With paper payments, Suppliers and Contractors worry about checks getting lost or delayed in the mail and/or often need to send employees on runs to pick them up at the back-office or job sites. It doesn’t pay to continue using paper checks when various far more reliable electronic payment methods are available. These include Virtual Credit Cards, Real-Time Payments, Wire Transfers and Standard and Same-Day ACH. The benefits of electronic payment for business are numerous. Transitioning from paper checks to one of these safer methods results in faster processing, as well as a reduced risk of fraud and overall costs.
Tips for Making the Transition to Electronic Payment Methods
Hyphen Wallet provides Suppliers a window into payments made by Builders with real-time payment status via a secure, dedicated portal. Instant reconciliation within Hyphen Wallet ensures a fast, accurate financial close cycle, improves cash flow visibility and working capital management. Safe, 24/7 access to 100% paperless transactions provides complete control, real-time messaging and transparency and greatly enhanced security.
To ensure the most seamless transition when setting up a new account in Hyphen Wallet, it’s important to train staff and explain all the benefits, monitor for fraud and reconcile accounts on a regular basis. Hyphen Wallet allows Suppliers to view payment reports in SupplyPro and download them into Excel to perform further analysis.
Invest in Electronic Payments to Improve Efficiency and Reduce Risk
By adopting technology and automating payment processes, Suppliers and Builders can reduce the time and effort they put into chasing payments, while greatly reducing the risk of fraudulent activity and cash flow shortages. Hyphen Wallet is an advanced invoice and payment solution for Builders to pay their Suppliers, Trades and Vendors when and how they want to get paid. The easy-to-use portal integrates seamlessly with current Hyphen Builder and Supplier ERPs, providing the ability to track, reconcile and report payments. Take the first step to safer, quicker payments by scheduling a demo.