The Benefits of Making Real-Time Payments To Suppliers & Trades
Real-time payments, the latest advancement in the digital revolution in money exchange, are driving fundamental change in residential construction payments, offering home builders a unique way to improve working relationships while gaining more visibility into cash management, reducing fraud and saving money.
Today, nearly 70% of all B2B payment volume is still paid by paper check. This is particularly true in the residential construction industry, where contractors often rely solely on paper checks to pay for labor, goods and physical supplies.
However, the proliferation of real-time payment systems in B2C, C2B and peer-to-peer situations has given rise to a change in expectations, even in the B2B world. When we know we can get instant payments from friends and family, it seems less reasonable to wait for checks to clear. Given these expectations, offering subcontractors and suppliers real-time payments is one way to contribute to their satisfaction and encourage them to continue working with you and giving you good terms.
Now, you can offer suppliers and trades real-time payments and other kinds of digital payments, while reducing your expenses and enhancing your operations.
1. Understand Costs of Payment Processing
If you are still using paper checks, it’s important to understand how much this function is costing your business and subtracting from your bottom line. The average cost of processing one paper check is $7.78, although the cost can be as much as $20 per check for some businesses. This translates to an average annual cost of over $70,000 per year for a small accounts payable team to process payments. Digital payments can save on the cost and time spent on manual processes and physical checks, and payment automation can pay for itself in as little as six months.
2. Ensure Greater Visibility Into Invoices
With builder-specific billing and payment management software, you can reduce invoice processing time by over 80 percent and reduce invoice errors by 23 percent. Home builders can view every invoice and payment executed to their trades in real-time and allow suppliers to also view payment reports. Everyone is up-to-date and on the same page, reducing time-consuming disagreements and solving any that occur faster and more easily.
3. Increase Transaction Security & Reduce Fraud
Accounts Payable automation is the #1 tool to fight business-to-business construction payments fraud. Most organizations report that checks are the primary target of fraud attacks on their companies. Paper checks can be misplaced or stolen, unlike digital payments. Real-time payments move across secure networks designed to mitigate vulnerabilities, and payment software includes built-in alerts and approvals that can notify builders in real-time if payments are suspicious, before transactions are completed.
4. Eliminate Payment Processing Equipment
Real-time payments can be initiated through smartphones, tablets, digital wallets and the web, eliminating the need for special payment processing equipment.
Make Real-Time Payments to Suppliers and Trades With Hyphen Wallet
Hyphen Wallet is an advanced invoice and payment management solution designed specifically for residential construction companies. It is 100% paperless, 24/7 always-on and globally compatible, with enhanced security features and multiple payment options, including real-time payments.
- Updates home builders’ back-office ERP with real-time status of every payment processed to their trades.
- Allows suppliers to view payment reports in SupplyPro and download them into Excel for analysis.
- Gives suppliers the choice in how they want to be paid (ACH, Same-day ACH, Check, Real-Time Payment, Debit Card, Hyphen Debit Card, Wire) and allows them to change methods when they want to.
- Integrates payment methods, currencies, etc. in real-time.
- Routes invoices and payment requests through a secure platform where all suppliers’ payment information, including account numbers, is also safely stored.
- Provides instant, automated reconciliation — for a fast financial close cycle, cash flow visibility and less opportunity for fraudulent payouts.
- Makes it easy for users to check records, track past and present expenses and identify fraudulent charges quickly.
Manual payment processing can cost you time, make fraud easier for criminals and leave you susceptible to scams. View our recorded webinar to learn more about Hyphen Wallet or schedule a demo today to consult with an expert at Hyphen Solutions.