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It’s time to put the ‘automated’ back in ACH paymentsHenry Auger August 25, 2021
Cashflow is the lifeblood of your business
If there is one thing hampering the construction industry’s growth, it’s payment practices. On average, AEC firms wait 83 days for payment. For an industry that places such a high importance on cashflow, it’s hard to believe that firms are settling for that average.
The first step to improved cashflow is to move from manual payment processes to digital processes. The next step: increase transparency and speed of payment by taking advantage of electronic payments. You will be happy to hear that the transition isn’t as overwhelming as you may think.
From manual mediocrity to digital dominance
As of 2019, nearly 70% of all B2B payment volume was still paid by paper check. By relying on manual processes like paper checks, you sacrifice transparency, security, and, most importantly, speed. The good news is, there are multiple options for digital payments and software that can automate, track, and speed up your payment processes.
There are three main methods of digital payment – credit card payments, wire transfers, and ACH payments. Each option is an improvement over manual payments, but of the three, ACH payments are typically the most affordable and popular option for firms.
ACH (Automated Clearing House) is a network used to initiate electronic money transfer between two banks. Not surprisingly, ACH payments are rapidly rising in popularity. According to Nacha, the ACH Network processed 7.3 billion payments in Q2 of 2021, 655 million more than the same time in 2020. The value of those payments was $18.4 trillion, an increase of 24.6% from a year earlier. Additionally, B2B payments increased 28.7%, to 1.3 billion payments. It’s safe to say ACH payments aren’t going away anytime soon.
The rise in ACH popularity within the AEC industry likely has to do with the increase in remote workers. People weren’t in the office to receive and process paper checks, so they required digital payment solutions. Now that they have experienced how much easier it is, many firms don’t want to go back to pushing paper.
The Hidden Cost of ACH Payments
Often, benefits come with some cost, which is the case for ACH payments. While they certainly provide substantial benefits, there are some up-front and hidden costs involved people don’t often realize.
The up-front cost involves a flat fee per transaction, or a negligible percentage per transaction. Credit card processing fees for B2B transactions range from 3.5-4.5% or higher, depending on the processor, and wire transfer fees up to $60 per transmission, ACH is typically the most affordable option.
And yet, people often forget about hidden costs. While ACH payments have the word ‘automated’ in the title, nothing is automated about them. Each payment requires time and effort to reconcile with individual invoices for every project. In addition, it’s tough to get clear visibility on who paid you and for what amount. You receive an ACH payment, but it doesn’t tell you who the payment was received from or any details on what the payment was for. This requires your accounting team to reconcile bank statements with individual invoices, wasting valuable time that could be used for higher-level work.
Take advantage of the EVPay feature included with EleVia Electronic Invoicing
If you have Deltek Vision or Vantagepoint or EleVia Electronic Invoicing but haven’t seen how the free EVPay add-on works, then you are in for a treat. We have heard from customers more and the past few years that they needed a solution to streamline and automate the ACH payment process. You spoke; we listened.
No more manual reconciliation of ACH payments. No more manual entry into Deltek. And no more short pays, forgotten payments or lost invoices.
Below is a high-level overview of how EVPay can radically change how your firm processes and tracks ACH payments:
Minimized Manual Entry
- Reduced touches when processing payments from 7-steps to 3-steps
- Client is automatically sent a paid receipt and you receive an invoice for each payment
- Easily track where each payment comes from and details of the payments
- Monitor cash flow in real-time through rich data visualizations on a unified digital dashboard.
- Compare performance of PICs or PMs across all their projects
- Quickly get paid with a ‘Pay Now’ link encouraging clients to pay in full.
- EVSecure™ ensures the highest level of security for your clients and compliance with industry standards.
- Eliminate the risky practice of writing customers account numbers on paper.
- Customers enter ACH information only one time and it is saved in the system reducing data entry errors on future transactions.
If you are interested in taking advantage of this powerful add-on for EleVia Electronic Invoicing, schedule time with one of our experts and see for yourself how the EVPay add-on puts the automated in your ACH payment process.