Page 16 - MUFG Spring 2021

Accounts Payable
automation helps prepare businesses for dislocating events
COMPANIES SHOULD SEIZE OPPORTUNITIES TO MIGRATE TO DIGITAL PAYMENT ALTERNATIVES
Digitizing accounts payable (A/P) payments and processes can provide both dramatic efficiencies and business continuity value as companies migrate from paper to electronic payments.
Traditional A/P payment processing includes chasing approvals through email and phone calls, printing paper checks to pay vendors, manually collating checks with printed invoices, tracking down executives for check signatures, and stuffing and mailing envelopes. It’s time consuming, labor-intensive, and expensive, and a challenge in the face of dislocating events as various businesses have learned during recent events of various natures. Paper-based payment processing generally requires employees to work from a company office, where they can access check printers and the executives who authorize payments.
A/P digital solutions that can address these everyday and situational challenges have been around for years, but new options offering efficiency and business continuity benefits continue to emerge. Below are some alternatives companies should consider to electronify their payment processes.
TIME-TESTED ACH
Now in its fifth decade, the Automated Clearing House (ACH) payment network is a mature, reliable, secure, and cost-effective electronic payment option. It’s a popular alternative to checks for trade, tax, and payroll payments because it eliminates check printing and related issuance costs. In a recent 5-year period, ACH annual transactional volume growth exceeded 7%, with the total value of payments reaching nearly $56 trillion in 2019.1
While checks generally take several days to print, deliver, get deposited, and settle, standard ACH payments take just one to two days from origination to settlement. What’s more, Same Day ACH, which may be used for debit and credit entries, offers even faster settlement for transactions.
ACH supports business continuity in times of crisis by ensuring employees’ pay is deposited directly into their bank accounts, even when they’re working remotely, and eliminates the need for them to travel to the bank or wait for funds to clear. Similarly, A/P staff can
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MUFG TRANSACTION BANKING AMERICAS GROUP / SPRING 2021