Fierce competition in the real estate market has shifted back-office innovation from a nice-to-have to a must-have. Real estate companies are searching for cheaper and more efficient ways of doing business while continuing to enhance financial reporting and mitigate potential fraud and risk.
No wonder, then, that electronic payments are a top priority of real estate companies.
Migrating to electronic payments is proven to drive down costs, improve efficiency, accelerate cycle times, and reduce fraud losses. Electronic payments also mean that executives no longer need to spend countless hours signing checks.
Here’s why so many real estate companies are bullish on electronic payments, and you should be too:
- Competitive advantage – Electronic payments are key to achieving best-in-class results. 45 percent of best-in-class accounts payable departments have established electronic payments as a standard means of paying key suppliers, Aberdeen Group reports. What’s more, 48 percent of best-in-class accounts payable departments have integrated their payment system with their enterprise resource planning or other financial enterprise application.
- Reduced check fraud – Paper checks remain the dominant payment form targeted by fraud, with 85 percent of affected companies reporting that their checks were targeted, according to AFP’s Payments Fraud and Control Survey. With the typical loss from payments fraud totaling $19,200 annually, real estate companies simply cannot afford to maintain the status quo with payments. Only 23 percent of businesses experienced attempted payments fraud via ACH.
- Lucrative Virtual Card rebates – Virtual Card programs are also gaining popularity for the lucrative rebates that are provided by the issuer based on spending. It’s not unusual for midsize companies to earn hundreds of thousands of dollars annually in Virtual Card rebates, adding value for accounts payable.
- Improved compliance – Today’s regulations require an entity’s governing body or board of directors to install effective internal controls. With electronic payments, businesses obtain traceable Sarbanes-Oxley audit trails. Virtual Card programs also comply with industry security standards. Paper checks are hard to control and easy to misplace.
- Cost savings – For many real estate companies, the high cost of processing paper checks is reason enough to transition to electronic payment methods. PayStream Advisors’ Electronic Payments and P-Cards Adoption Survey found that the need to reduce procure-to-pay transaction costs is the biggest factor driving electronic payments. Here’s why: processing paper checks costs businesses an average of $7.15 per item, according to Aberdeen Group. Compare that with the average cost to process ACH ($0.30) or Virtual Card (zero) transactions and you see how the potential savings can add up quickly. By transitioning to electronic payments, some businesses have experienced cost savings of more than 60 percent.
- Faster turnaround – Electronic payments can be processed within seconds, whereas a standard check payment could take several hours or more, plus manual handling.
Each of these benefits is compelling. Together, they are the reason that more real estate companies are migrating to electronic payments.