Don’t Give Up on Checking Just Yet

by Jose Jimenez | Dec 28, 2020 | Accounts Payable

By Matthew Albert

There’s a rather poignant moment of irony in the undisputed, unchallenged motion picture classic “The Blues Brothers” where Elwood picks up Jake from a Joliet prison in an old Mount Prospect police car. Naturally, Jake is rather upset and demands an explanation. (Hey, it’s my mini-review. Take that, Ghost of Ebert!)

After Elwood leaps an opening river bridge and clears the gap with no damage done to the suspension, he tells Jake something that inevitably changes the audience’s outlook on life as we know it. Something so crucial, we can’t help but think about how we have grown as humans in the first few minutes of the film. Elwood says that while the car may have an undesirable exterior, “It’s got a cop motor, a 440 cubic inch plant, it’s got cop tires, cop suspensions, cop shocks. It’s a model made before catalytic converters so it’ll run good on regular gas.”

Which brings us, obviously, to checking. Here’s the thing: Checking’s outdated. However, being outdated doesn’t mean useless. In fact, sometimes older things don’t change over time because parts of them continue to outperform other things. When compared to current payment methods, checking still has those good cop shocks and cop tires. It’s why over a third of businesses still prefer to use them.

Let’s take a closer look at which parts of checking are worth riding out and which parts are worth avoiding.

Checking Advantages

Before the invention of credit and debit cards, checking was the preferred method many individuals used to make payments. Checking allows people to:

• Make large payments without the worry of carrying excessive cash. Big win there.
• Mail more secure payments than mailing cash. For the business world, checks are most valued for the control of finances they offer. When a business or individual signs their name to a payment, it creates a sense of accountability and certainty that payments are reaching their intended vendor. It takes less active thought for someone to swipe a plastic card or hold their phone to a chip reader then it does to physically write out payment.
• Keep a detailed record account, which is helpful in the prevention of checking fraud and false payments that could occur among employees or from outside the company.

Disadvantages 

Unfortunately, despite the many advantages found in checking, several disadvantages exist.

• Checking requires more time and is therefore less efficient than other methods of payment. It also isn’t completely fraud-proof. (But then again, lots of methods have some weakness to fraud. That’s why we covered lots of them on this blog in our uber-special 3-part fraud series.)
• Checking is a costly form of payment. There are many expenses included in the process, from paying for the paper supplies to write and send checks, to the receiving and approving fees of checks.
• Many retail chains and vendors choose not to accept checking as a valid means of payment in their business. This can prove challenging for a business who relies on checking in all their business costs. 

How does Technology and Checking work? 

With so many risks, and with the increase of security in other forms of payment, businesses often question if check keeping and writing is the best alternative for them. That is why it is important to note the influence technology has had in the improvement of checking. Advanced check writing, or digital checking, offers competitive advantages that traditional checking cannot.

• It’s more cost effective. Online technology allows businesses to skip the fees they would normally pay with physical checking.
• Advanced checking is more time-effective, meaning that businesses can focus on other areas of their work and direct more energy in production of services.
• Many online checking technology programs offer cloud-based software for their clients to use. This means that companies have easier and more convenient access to their checking information. Online services often have app options, meaning that business owners can check their payments on their mobile devices.
• Online advanced checking technology is economically friendly. Many businesses are concerned with the carbon footprint they leave in their daily use of materials. An online alternative gives employers and employees the satisfaction of knowing they are doing their part to responsibly cut down on the use of paper materials and waste. 

So like we said earlier, checking has parts that make it worth it and others that don’t. Your reliance on checks ultimately depends on the needs of your business. We still feel it’s important to keep an open mind to advanced checking as it continues to improve as a reliable source of payment. As your business grows and finds the need to improve your checking payment methods, feel free to reach out to an oAppsNET Partners consultant to learn more today.

(And don’t let me catch you playing the Armada Room at the Holiday Inn! You’re better than that.)

Curbing Employee Turnover

by Jose Jimenez | Dec 19, 2020 | Accounts Payable

By Matthew Albert

Jump in your Wayback Machine (no Hot Tub Time Machine, please; we’re social distancing) and join us for a trip to your 5th grade classroom. As we hop out, we see…..AH! We’re just in time to watch your 5th grade self begin a group assignment with the classmates at your 4-desk table. Now, if we had to guess, in a group project, you were probably one of these types of students:

• The one who got frustrated because everyone else was too stupid to do the task the right way, so you did it all yourself.

• The one who feigned incompetence to get the entire group to do the work for you.

• The one who was definitely good enough to do the whole project, but you were fine letting someone else take the reins because they were liable to snap at any point.

• The consummate team player who actually knew how to have everyone get along and enjoy each other’s company before someone got bored and had to go to the restroom.

Well that visit to the past was fun. Let’s come back to 2020. If you’re someone who heads up a department or possibly runs your own business, you are now in your 5th grade teacher’s shoes every single day. You have employees who are basically working on a group project that lasts all day, every day. And you probably have some employees that rock it all the time, some employees that ride coattails, some employees that are trying hard and learning, and (unfortunately) some employees that you’d gladly boot if someone better came along. Whether you want to admit it or not, the reality is that you need all of these employees to be a cohesive group in order to make the business succeed. One of the best ways to grow this cohesion is by reducing employee turnover. (By the way, your child’s teachers still gladly accept certain, uh, BEvERages, for holiday presents.)

Let’s take a look at some of the ways you can keep your employees productive and willing to work for you each year.

• Demonstrate that every employee is valued. Employees feel valued when they know you hear them and pay thoughtful attention to them. Some employees open up in large group settings. Some are more willing to talk in 1-on-1 environments. Learn what your employees prefer and interact with them in those settings. If you lead a department or run a small business, try to find a way to hold regular individual meetings with your employees. Make these conversations about business strategies but also about their own goals and what you can do to support them. If you run a larger business, give your department heads sufficient time to meet with their own people.

• Craft backup plans for protocols. When things go awry, stress goes up for your employees and you. Having backup plans reduces stress and keeps everyone calm. Calm employees stay. Stressed employees leave.

• Hold monthly staff meetings. These meetings should review the most important procedures to ensure quality control. However, you’ll want to incorporate a fun activity or brief game of some kind that fosters teamwork. Sacrificing a few minutes of productivity to maintain collegiality does not destroy your bottom line. You’ll make those lost minutes back when your employees are fully synergized.

• Open your door. Even if you already meet regularly with employees, you can’t always schedule when they’ll need you the most. Keep your door open and let them talk to you. If your employees like working for you, they’ll rarely abuse this time because they’ll be motivated to get the job done. If they do abuse this policy, though, it’s on you to let them know directly and plainly.

• Know what your employees do. When you hire an employee to do a set of specific tasks, you need to have a good idea of what you’re actually asking them to do. Learn what your employees do, even if it’s way beyond your own skill range. Simply knowing a little about each of your employees’ jobs goes a long way in helping you relate to them during conversations.

If these seem simple, it’s because they are. The basic rules? Treat your employees like people, hold them realistically accountable, and make it known when you like what they’re doing for you.

Payment Methods

by Jose Jimenez | Dec 12, 2020 | Accounts Payable

By Matthew Albert

Consultation with a client? Check.

Services rendered? Check.

Client happy? BIG check.

Payment collected? *crickets*

Payment collected? *Bueller…Bueller…Bueller…*

PAYMENT collected? *Frye…Frye…Frye…*

Ah yes, the old “How do I get the money?” problem. Let’s face it: Cash is outdated and has been for some time. You probably already know that.

So how do you get your money in a safe, timely manner? Obviously, you want to make sure you don’t get ripped off. At the same time, you also want to make sure the client’s payment experience is smooth, too. After all, if paying you is a hassle, your client won’t want to be your client for much longer.

Let’s take a look at possible payment methods and weigh the benefits against the drawbacks.

Checks

Let’s start with the oldest known form of payment we currently have–the check. The concept is simple: I give you a piece of paper that says I want to give you this much money; however, all of that money is in another building.

For all of the ease checks give us, the bottom line is that they are still paper-based, inefficient in today’s world, and subject to misplacement. Not great.

Wire Transfers

Now we’re talking speed here! Wire transfers give you peace of mind that money sent on one day arrives the same day. All you need are routing numbers and account numbers. The bank takes care of the rest.

As an added bonus, wire transfers are pretty secure, too. Unfortunately, there are a couple of drawbacks. The first is that wire transfers often carry high fees for the customer. The second is that if wiring money from one bank account to another, banks can sometimes place holds of approximately 3 days (sometimes more) on when those funds are available. That kind of defeats the purpose of same-day service.

For all the headaches that may cause you, wire transfers are still a pretty good move for your business.

Automated Clearing House (ACH)

Similar to wire transfers, ACH payments provide ease and speed. This method is the one most companies prefer when they pay employees via direct deposit.

Compared to paper checks, these metaphorical “eChecks” never get lost in the mail. They also carry lower fees than typical wire transfers. You can even lump payments together to the same payee and not incur extra fees.

On the flip side, ACH payments sometimes get held up for 1-2 days for verification and an additional week to complete the transfer. If you’re in need of warp speed, it’s not the best option.

Credit Cards

Who would’ve thought that the idea for Diners Club would turn into the behemoth today known as the credit card industry? Actually, the people behind the Diners Club probably did. But anyway, here is another electronic option that’s widely used around the world. Most of the benefits are related to convenience.

People who prefer to pay with cards often get benefits on their cards (e.g. points, frequent flyer miles, cash back, etc.), they don’t incur extra fees by using the cards, and they usually have them available more frequently than cash. Business credit cards function mostly the same way and provide extra security by not forcing people to use their personal cards and get reimbursed. On top of that, credit card companies will also give you tidy, itemized reports to help with your recordkeeping.

At the same time, it’s not necessarily a slam dunk decision. Credit cards often carry merchant fees where the recipient of payment gets assessed a fee rather than the person using the card. If your business is getting a bunch of these fees, then you’re not getting your full profits.

Digital Wallets

Digital wallets use software to store credit card numbers, debit card numbers, and other payment information you may have. This info is often stored on phones, computers, in the cloud, and any other electronic device you can think of that has the capacity to store data. Gone are the days of trying to remember a bunch of digits, expiration date, and security code. Who has time for that when you’re reluctantly binge-watching that latest show you’ve been guilted into?

Of all the payment methods listed here, this one will probably feel the fastest to you. It’s also the safest in terms of public health. We’re in a pandemic right now. There’s no need to pass physical objects back and forth with each other if we don’t have to. Digital wallets solve that problem.

So why wouldn’t you accept digital wallet payments? Well, they’re essentially useless if your area does not have reliable internet service. Since you’re reading this blog, though, you probably have reliable service somewhere. The other big fear is hacking. If you encounter a data breach, let the pain begin.

In all honesty, while the bad times could be terribly bad, they’re still rare if you’re responsible. The positives likely outweigh the negatives.

There you have it!

A set of options, each with their pros and cons. Which one should you use, though? That decision will depend on the needs of your business and how quickly you need transactions processed. Consult with your AP employees and make the choice that best fits your company’s needs.