What do whiskey, South African rhinos, paper checks, and the USPS have in common?
According to Mashable, all of these things will be obsolete (or be very different than they are today) by 2020. (That is only five years away. How time flies!)
There have been countless articles published declaring the end of paper invoices, paper checks, and paper everything. Yet, here we are in 2015 and 54% of invoices are still sent through the USPS and 52% of payments are still paper checks.
However, when you see the USPS and paper checks flanking glaciers in an article of things that will cease to exist as we know them today, suddenly the threat to businesses seems real. Below are the details on why Mashable is right and how businesses should prepare.
Why your business may want to prepare now for the extinction of paper checks
The postal service challenge
It’s no secret that the USPS is struggling. The price of stamps has increased more in the past decade than in the previous twenty years. Post offices across the US are threatening to close due to financial burdens. Between hurricanes, eight-foot-high snow piles, and the melting glaciers chances are your invoices have been delayed more than once due to harsh weather conditions.
The focus for any organization should be getting invoices to customers quickly and accurately by offering a range of electronic channels for customers to receive their bills. Many organizations have eAdoption plans in place to help customers make the switch to electronic methods which reduces DSO and overall costs.
Paper checks are dead
Once paper checks are no longer used by consumers, the days of cutting checks for vendors will soon follow. Paper checks used in business transactions have been slowly deteriorating. Over the past three years, the rate of decline for checks accelerated to 9.2% compared to a 5.5% decline in three years prior.
In order to stay ahead of the change, businesses should urge their customers to use electronic forms of payment. In contrast to their paper counterparts, electronic payments can be deposited directly into a business’ bank account while transactions post to customer accounts immediately. Also, by using cash application automation companies can easily match electronic payments with its corresponding remittance, even if it’s decoupled.
So fear not, credit teams. When checks and the postal service are no longer with us, your cash flow won’t feel a thing. You can’t say that much for the whiskey.