Vendor Payments Demystified: 3 Popular Payment Types for Managing Your Invoices
by The Ottimate Editorial Team
When it comes to managing your company’s accounts payable (AP), choosing the right payment methods can make you feel like you’re navigating a sea of confusion — especially if you’re still using a manual payments process.
Payment automation solutions, like Ottimate’s VendorPay, streamline the payments process for businesses of all types and sizes, ensuring your vendors are paid on time and with their preferred payment method.
From the simplicity of virtual cards to the ease of ACH transfers and the familiarity of checks, let’s demystify payment automation and break down the three most common payment types — so you can be empowered to make better financial decisions for your business.
What is Payment Automation?
Paying your vendors is a critical step in the accounts payable process. But manual payment processes can be time-consuming and costly. There’s also a higher risk of mistakes — it’s easy to invert numbers or write incorrect amounts on checks or in ledgers.
Recordkeeping can also be a challenge when it comes to manual workflows, with paperwork easily being lost, misfiled, or difficult to access quickly. That’s why many businesses have turned to payment automation to simplify their payments process and eliminate bottlenecks in their AP workflows.
Payment automation is like having a personal assistant for your finances. It’s all about using technology to streamline the process of paying your vendors, so you can save time, reduce errors, and keep better track of your cash flow — all with the click of a button.
With payment automation, you can leverage cutting-edge software solutions to digitize and streamline the entire payment lifecycle — from initiation and approval to execution and reconciliation. By automating repetitive tasks and integrating seamlessly with existing financial systems, payment automation empowers businesses to enhance efficiency, accuracy, and control over their financial operations.
3 Types of Vendor Payments
1. Virtual Cards (vCards)
Virtual cards (or vCards) are randomly-generated single- or multi-use credit card numbers that are linked to your credit card account. vCards are generated for specific amounts, which can be used for any type of electronic payment, including bill and invoice payments.
Vendors often prefer virtual cards due to their security, timeliness, and efficiency. vCard payments ensure vendors receive accurate payments in the fastest time possible. And vCards offer more protection than a traditional, physical credit card; once a vCard has been processed, it can’t be used again. This helps keep hackers away from your account — and helps prevent your team from overspending.
Benefits of Using Virtual Cards
2. ACH Payments
Automated Clearing House (ACH) payments are often considered the backbone of electronic funds transfers, facilitating seamless transactions between bank accounts. With ACH, you can transfer funds electronically from one bank account to another, making it easier to pay your vendors, bills, and employees.
ACH payments offer a fast, secure, and cost-effective alternative to traditional payment methods, like checks or credit cards. With the click of a button, you can initiate an ACH payment, which will land in your vendor’s account within days. When paying invoices through a payment automation solution like Ottimate, you even have the option to upgrade to FastACH (for an additional fee) and send funds the same or next day — so your vendors are paid on time, every time.
Benefits of Using ACH Payments
*expedited ACH processing with VendorPay’s FastACH is available for an additional fee
3. Checks
Despite living in a digital world, paper checks are still a popular way to pay bills and manage expenses. These hard-copy documents serve as a familiar and versatile means of payment, offering businesses a time-tested method for making transactions.
Benefits of Using Checks
Automated payments are also a great way to mitigate some of the common pitfalls of processing checks in-house. Organizations looking to streamline their payment workflows need solutions that make it easy to navigate issues like checks getting lost in the mail or hard-to-access paper records to wade through whenever a question arises or an audit is needed.
With a payment automation solution like Ottimate’s VendorPay, we take care of cutting and sending checks for you. This means no more wasting time writing checks on your own and hoping you have the supplies on hand to do so. You’ll also have digital copies of every check transaction processed, so you can pull up records in seconds — no more digging through paper files to find what you need.
Expedited Checks with Ottimate
In the world of AP automation, not all solutions are created equally — especially when it comes to sending checks. Look for AP providers that offer you the ability to choose between different delivery times, including expedited options like priority or overnight delivery.
For vendors who prefer checks to electronic payment methods, an end-to-end software like Ottimate gives you the flexibility to pay them with ease. With Ottimate, you have the power to choose how fast checks reach your vendors, so you can ensure they’re paid on time, every time.
Want to Learn More?
Check Out Ottimate’s Guide to VendorPay Payment Types!
Get Started with VendorPay
Payment automation is a game-changer for businesses looking to streamline their financial processes. By automating your payments process, you can ensure an efficient, secure, and cost-saving workflow. And whether you’re using virtual cards, ACH payments, or good old-fashioned checks, there’s a solution out there to fit your needs.
Embrace the future of payments with payment automation and revolutionize your financial operations today.
Ready to embrace the power of payment automation and revolutionize your financial operations? Look no further than VendorPay, Ottimate’s full-service payment automation solution designed to simplify accounts payable operations and supercharge your accounting workflow. With VendorPay, you can automate payment approvals, choose your preferred payment type, and gain greater visibility and control over your finances — all in one convenient platform.
Learn more about VendorPay by scheduling an Ottimate demo today!