Accounts Payable (AP) departments and teams are working harder than ever to make timely payments, while trying to meet the ever-changing payment acceptance demands of their suppliers. AP departments are also under constant pressure from their perspective organization to cut costs, add value and ultimately to be viewed as a revenue generating cost center, which is always a challenge.
As all industries are being pushed by their suppliers to move away from the inefficiencies of paper checks to one of the acceptable forms of electronic payments, industries struggle to pick the ‘best’ electronic payment solution for their business-to-business (B2B) supplier payments.
There are two (2) primary electronic payment solutions for organizations to select; 1) Automated Clearing House (ACH), and 2) commercial virtual credit cards. Both solutions offer multiple forms of customizability within their unique payment method, but we’ll defer those differences for a future post.
If you’re trying to decide which of these two electronic payment options best suits your organization as a whole, below is a chart that helps to explain the main differences between ACH and virtual cards. Seeing the differences (and similarities) side-by-side will provide knowledge when it comes to deciding how to pay suppliers in the future.
So, which electronic payment option is best for your organization? The key for organizations is to not become too overwhelmed by choosing which one, ACH or virtual card payments, to pay your suppliers because you can do BOTH simultaneously. One payment method typically will not meet the needs of an entire supply chain and often internal payer teams cannot agree on the best course of action.
All too often, we see organizations continue to push payment automation upgrades out to future dates and give it a low priority, and ultimately nothing changes. However, suppliers are more equipped today to handle and accept electronic payments from their customers. Stay ahead of the ‘ask’ and offer an electronic payment solution that will save everyone time, money and frustration. It’s critical to protect and nourish all payer/supplier relationships.