With today’s technology’s continuing to advance at rapid speed, customers expect more convenience and flexibility when it comes to making payments. Electronic funds transfer (EFT), a digital payment process that involves directly exchanging funds between two bank accounts, is the choice of many companies to satisfy these customer demands. The most commonly used network for EFT transactions in the United States is the Automated Clearinghouse (ACH).
The benefits of EFT include:
- Reduced transaction processing costs
- Improved efficiency
- Increased visibility
- More control
In addition, companies that are able to process EFT credits and debits have access to a new growing market for goods and services. In 2012, the Automated Clearing House (ACH) financial network processed an estimated 21 billion transactions with a total value of $36.9 trillion (https://www.nacha.org/node/1356).
To utilize the benefits of electronic funds transfer, companies need a digital interface to the ACH network, which Sage 500 ERP 2014 can now provide…
Reduced transaction processing costs
Every day, the financial industry uses tons of paper in millions of transactions. Paper bills and checks squander valuable resources and drain company budgets. Electronic funds transfer is the answer to this challenge. Using EFT, most companies will realize savings in paper, labor, printing, and handling.
These savings can be substantial and provide companies with a competitive edge.
Example: While it costs the U.S. government $1.03 to issue each check payment, it costs only 10.5 cents to issue an EFT payment (https://www.fms.treas.gov/eft/index.html). That is $0.92 in savings per payment.
Improved financial performance
Receiving payments the old-fashioned way is a time-consuming process: you send the invoice; you wait for the check; you process the check. Using EFT to receive payments is significantly faster and allows for faster collection of the funds. This leads to improved cash flow, reduced day-sales-outstanding (DSO), and an improved credit position.
Increased visibility and control
Managing cash flow with checks is difficult. Companies have to wait for checks to arrive in the mail, find the time to process them, and apply them to the correct accounts. And if customer payments are delayed or missing, managing your cash flow properly becomes almost impossible.
Access to new markets
Because of its strong benefits, electronic processing has become the fastest growing type of electronic payments ever. Today, the ACH network processes credits such as direct deposit payroll and vendor payments, as well as direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. The market for ACH is huge:
- In 2012, the ACH Network processed a total of 7.0 billion ACH credit payments,an increase of 5.4 percent over 2011.
- Consumer-initiated entries, or CIE credit payments used primarily to pay bills, grew by 7.6 percent in 2012.
- Business-to-business (B2B) transaction categories grew by 5.1 percent. Source: https://www.nacha.org/node/1356
How can Sage 500 ERP 2014 help?
To realize the advantages of electronic funds transfer, customers need an interface to communicate with the ACH network. Sage 500 ERP 2014 now includes the ability to process ACH transactions through Sage Payment Solutions.
Sage 500 ERP 2014 customers using Sage Payments can now electronically process debits and credits, such as:
- Direct receipt of sales outstanding (cash receipts).
- Business-to-business payments.
- E-commerce payments.
Contact Our Sage 500 ERP Team
If you have questions about EFT Payment Processing with Sage 500 ERP, please contact our team online.