What are the benefits of paperless banking?
Whether you are planning on helping the environment or looking for reduced banking fees and cutting administrative tasks, paperless banking offers some compelling solutions.
Billing and remittances work in the same way and so ensuring that your organisation uses electronic invoicing and receivables processes will ensure that you make the most of the potential savings. There are additional benefits, such as protecting your business from fraud and streamlining your back-office accounting processes.
Dispensing with paperless invoices means that you not only save time in the office but also deliver bills to clients immediately, removing the delay associated with traditional surface mail delivery. You may be pleasantly surprised to discover that many clients prefer to deal with invoices as quickly as possible to avoid a build-up of debt. From the client’s point of view, it also allows them to plan ahead and effectively use any period of grace, such as a 30-day payment period.
In creating an electronic record, you will also be clear as to when payment is due. It’s best if you use a system which notifies you automatically when payment is due so that you can issue reminders in a fixed period before the due date.
Most banks will also provide online systems with a (near) real-time view of your account, including any outstanding company card payments which have not yet been cleared. The balance of your account may be subject to some delay in updating the balance based upon debits and credits, depending upon the payment mechanism used. It is always wise to maintain your own internal banking ledger for an accurate view.
Closely monitoring your account will also help you to identify any unauthorised payments and avoid fraudulent activity with business funds. The chances of fraud are increased by paper invoicing since your details will appear on a document which passes through many hands, providing opportunities for identity theft, phishing and other forms of fraud. Since electronic records can be printed at any time, many organisations choose to shred any redundant paper copies in the interests of improving security.
Carefully managing cash flow is key to the stability and viability of any business and paperless banking helps with this. By encouraging clients to sign up for paperless billing, you will benefit from shorter payment cycles, improved security and reduced administration costs. If you offer a discount for paperless billing, the client will benefit too.
Essentially, everyone wins in these circumstances since you will be able to pass on some of the savings associated with going paperless to the client and thus reduce their costs too, with the added bonus of encouraging customer loyalty.
The fact that some banks now charge for paper-based information, such as statements, shows banks are making a digital shift. The major banks are keen to encourage clients to adopt paperless banking and in some cases are offering deals on minimum balances and small business bank account fees. Try to avoid being one of the firms left paying fees for the privilege of receiving an out-of-date paper statement of your account.
Your green footprint is a valuable marketing element and should be promoted to clients. Global warming is a critical political issue, and regardless as to the sector in which you are operating, showing that you are concerned about your firm’s impact on the environment will engender positive reactions from clients.
Your efforts may feel as though they are a drop in the ocean. However, by making an effort in your everyday financial activities, you will be seen to be recognising the environmental issues facing businesses around the world.
Businesses introducing a software ecosystem will soon realise that an automated financial system works on many levels with a positive effect throughout the entire organisation. Further examples may include the introduction of prepaid business cards such as those provided by Soldo, together with the associated mobile app enabling expense claims from staff to be submitted in real-time.
Paper receipt trails will be a thing of the past as staff can take a photograph of receipts and submit them immediately. Soldo prepaid company cards help save on time and paperwork, eliminating the need to fill out traditional paper expense claim forms and freeing staff to concentrate on other essential tasks. Equally, your finance department can reconcile costs immediately, see transactions online and manage cashflow in real-time.
The impact of 24/7 access to your accounts, including access from mobile devices means that if you want to check any transaction, the information is readily available.
Banks will also offer you the opportunity to access statements from previous months or years, ensuring that you no longer have to decide as to which paper records you should destroy.
Business owners may find themselves under pressure from their bank to adopt paperless practices. It is essential to understand that this is very much a two-way street, and you should make sure that you are taking advantage of any savings that they confer. The latest digital features in modern banking are designed to provide a better service for the end customer, in addition to reducing costs for the banking institution.
Ultimately, the benefits of moving to paperless banking are substantial, not only from an environmental perspective but from a security one too. Business owners should make transferring to paperless banking one of their primary goals, particularly with so many new and disruptive technologies in the banking sector.