3 payment trends to watch for in 2020

 

A new decade is upon us, and the payments landscape is changing FAST. Here are our 3 payment trends to look out for in 2020. 

 

Shifting focus from P2P to B2B

 

Peer-to-peer (P2P) payment services have become increasingly popular, especially in the U.S., as companies like Zelle and Venmo have become household names. However, while the last few years have seen many new innovative options become available to consumers, very few innovative solutions have come to market for business-to-business (B2B) payments…until now. 

 

B2B payments involve complex, manual processes, where paper checks still account for roughly half of all corporate transactions. Organizations, both large and small, are actively looking for digital, account-to-account payment options, and payment technology companies capable of offering flexible, functional solutions will be able to capture a market many times larger than P2P payments. 

 

Real-time in no-time

 

Payments will not just become increasingly digital, they will become faster! The idea of a real-time payment, once a myth, is slowly becoming a reality. Canada and the U.S. have yet to implement said systems, but the U.S is taking significant steps towards a faster payments system, while Canada has begun discussing the path towards modernizing its payment rail. Approximately ¼ of the world’s countries have already, or are currently implementing a faster payment ecosystem, and this will undoubtedly become the new reality. 

 

While real-time payments have yet to come to fruition in North America, payment providers who are prepared will stand to reap the benefits of this digital transformation. As one article states, “solution providers stand to gain from an evolution-not-revolution approach to adoption…” and this evolution has officially begun. 

 

Cash is no longer king

 

While cash may be accepted (almost) everywhere, it’s now clear that consumers prefer digital payment options. In Canada, small businesses now do fewer than 25% of their transactions in cash, and that number is decreasing fast. Cash still has its place, but consumers have made it clear that the best payment experience is no experience at all. Services like Amazon and Uber have made it as simple and painless as possible to pay, while credit cards have mostly moved to contactless payments. The adoption of digital wallets has been slower in North America than the rest of the world, but adoption rates are steadily increasing. Finally, businesses, especially small businesses that have less access to alternatives, have begun demanding new options. In fact: 

 

  • More than 80% of small businesses want more payment options
  • 61% of businesses surveyed would move away from cash, if they had other options
  • 67% would be willing to move away from checks, if they had other options

 

So 3 things have become very clear: 

 

1) Both consumers and businesses want digital payment options. Cash still has its place, but this is a digital era and payments must evolve to match other industries.

2) It’s only a matter of time before real-time payments are achieved. Both Canada and the U.S. are not there yet, but some payment providers, including Ablii, are ready. 

3) Business-to-business payments are lagging behind, with paper checks forcing businesses to spend far too much time and money on payables/receivables and reconciliation.

Check back in later this year to see if anything has changed!

 

 

 

 

Learn about ACH payments

In this post, we’ll take a look at what ACH payments are and how your business can benefit from using this mode of payment.

 

What are ACH payments?

Automated Clearing House (ACH) payments are an electronic transfer of funds between banks. These payments are transferred through the United States ACH network, which connects thousands of financial institutions nationwide.

ACH transactions are secure, fast, and cost-effective. While there are other types of electronic transfers such as credit and debit card payments, they aren’t ACH transactions. In fact, ACH payments are specific to bank account transactions.

To complete a transaction, the entity requesting a payment needs access to bank account information from the other entity involved. For instance, let’s say you need to deposit money in your employee’s bank account. You’ll need to get their bank account information, which includes the employees’ bank name, type of bank account (savings or checking), recipient account’s number, and the bank’s ABA routing number.

This information is used to transact payments to the correct account. The same information will be required by the billers when making pre-authorized withdrawals from their bank account.

ACH payments are mostly electronic from beginning to end. However, some users convert paper checks to electronic payments and the money is transacted through the ACH system.

 

How do ACH payments work?

When a customer sends you a payment through ACH, the funds will show up in your bank account as a direct deposit. Here’s a brief explanation of how ACH transactions work:

Sending payments: To begin, a customer has to authorize the transfer of an ACH payment. Similar to signing a credit card receipt or a paper check, they are required to sign an ACH authorization form (or give verbal consent). The ACH system enables you to set up one-time payments, recurring payments, or a series of payments made on specific dates.

Receiving payments: After an ACH transaction is authorized by the bank, the agreed-upon payment is transferred from your customer’s bank account into your account. Payments are typically processed within 3 to 5 days, although sometimes it’s received on the same day. Similar to paper checks, if there are insufficient funds in your bank accounts, the ACH payment will simply “bounce”.

 

Benefits of ACH payments

Let’s look at the key benefits of ACH payments for businesses:

 

  • Easier to track than check payments. ACH transactions are easier and faster to handle as compared to conventional payment methods such as check payments. As opposed to checks, ACH payments can be automatically set up, require less time to process (as checks have to be mailed), and cannot be lost.
  • More cost-effective than credit cards. For organizations receiving payments via credit card transaction (which charge around 2% to 4% per transaction, plus setup and operational fees), ACH payments often cost less to process. This is especially useful for businesses that have to collect several recurring payments.
  • Facilitates long-distance payments. Businesses can remotely receive ACH payments, just like credit cards. If a customer doesn’t want to give you their credit card information or don’t have one, ACH can be a great alternative.

 

Are ACH payments a type of EFT?

While ACH transactions are a type of Electronic Fund Transfer (EFT), ACH is specific to the United States, and each country uses their own domestic payments system. If you do not live within the U.S, you should check with your banking provider to learn more about how funds are transferred.

 

Conclusion

ACH payments are an easy, secure, and fast way to transfer funds between banks. They are more cost-effective than credit cards and also undergo a rigorous verification process before and during the transfer.

What payment options do you offer your customers? Let us know by commenting below.

4 accounting tips for small business owners

To run a successful business, you need to keep your books up to date. That being said, entrepreneurs often struggle in this area, and risk falling behind when focusing on growing their small business.

But good news! There are some tried-and-tested tips that can help you stay on top of your company’s financial health and efficiently track your business’ transactions. In this article, we’ll go over some actionable tips to help you take control of your accounting responsibilities.

 

Tip #1: Keep it simple

As a small business owner, you should consider using cash-basis accounting. It’s a simple accounting method that’s used to track income and expenses.

In cash-basis accounting, you record transactions only after they’re completed, and make a record when you get paid or when you make payments. Ideally, transactions should be recorded on the day they occur.

 

Tip #2: Know which data points to record

Recording everything on a daily basis may seem tedious at first, but keeping a detailed record of your money transfers is necessary for reconciliation purposes.

Here are the main data points you need to record for incoming funds:

 

  • Products or services sold
  • Customers (or businesses) to whom you sell your products or services
  • Amount received from customers (or businesses)
  • Date when the payments were received

And here are the data points you need to record for outgoing funds:

 

  • Taxes paid
  • Paychecks and bonuses
  • Business operating expenses (e.g. inventory, marketing, and equipment)
  • Overhead expenses (e.g. rent, utilities, and legal fees).

There are several reasons why you must keep a detailed record of your company transactions. For starters, it can help you claim small business tax deductions depending on your income or the business structure.

Moreover, some received money may not be part of your revenue. For example, the sales tax you collect isn’t revenue. If you put all your money into a single account, it will be difficult to separate sales tax payments from your actual income.

 

Tip #3: Follow up on receivables

Sending an invoice to your customers doesn’t necessarily mean you’ll receive the payment on time. Good practice involves issuing invoices as soon as you deliver a product or service as it significantly increases the chances of timely payment.

Remember to follow up with vendors who owe you money as the payment deadline approaches. You can also offer early payment discounts to motivate your clients to pay on time!

Additionally, accepting online payments and using cloud-based accounting software can help you streamline your accounting tasks. With Ablii, you can simplify your business transactions. The platform helps you automate your accounting, track receivables, and get your money faster.

 

Tip #4: Create financial projections

Financial projections and reporting may take time, but they can help you estimate where your business will be in the next few years. This information puts you in a good position to make sound decisions regarding investments.

Financial forecasting can be complicated for some people as it involves figuring out the different ways expenses can change due to forces beyond your control – such as interest rates and inflation – as well as decisions made by your customers. The same goes for revenue since you need to take various factors into account, such as an increase in prices and how many new customers you acquire each year.

Consider starting with a profit and loss statement, which tells you how profitable your company is over a period of time. By analyzing it regularly, you will be able to get insight into which business areas you’re making money and which ones you’re losing money in.

 

Conclusion

Accounting for small business owners may seem complicated at first, however, it becomes a whole lot easier if you implement some simple tips to better understand your business’ financial health.

Do you regularly record your business transactions? Share your best money management tips in the comments section below.

 

With your business network, comes great responsibility

Today is a good day. You’re happy with Ablii’s simple, low-cost, and easy way to make payments. But did you know, that through the power of your own network, you can further improve your payables and receivables process? And not just your payables and receivables, but that of each member of your business network?

Let’s start with an example. It’s tax time, and your vendor is doing last minute bank account reconciliation. You paid the invoice in question through Ablii months ago. Your vendor received the payment, and was notified by email. However, through a series of unfortunate events, your vendor accidentally deleted the payment confirmation email (gasp!). After combing through months of bank statements, they do the sensible thing and pick up the phone to call you. It’s 7pm on a Friday. Because you go above and beyond for your partners, you pick up the phone. Through a few quick clicks, you pull up the invoice, payment, and confirmation through Ablii and resend the information to your vendor.

In the example above, there is one key thing missing: information. One party has better access to the payment information than the other. Now, imagine this example again, but this time, both you and your vendor have access to the same information through Ablii. The result? Your Friday night is saved! Your vendor can easily access the same information at their fingertips.

Time saved with escalation management, as in the example above, isn’t the only benefit to having your network of vendors, customers, and suppliers all on the same payment platform:

Reduce fees

As only the “payer” pays a fee, the sender receives the money for free–unlike wire transfers, which are expensive and cost both the payer and receiver.

Better manage cash flow

Having all your payables and receivables in one place will help you manage cash flow for both your expected revenues and expenses.

Improve visibility

All parties have access to the same information, and you have timelines for when payments will arrive or leave your account. This is contrary to checks, where the payer is at the mercy of the receiver…who has up to 6 months to make a deposit.

Better reporting

Easily search payment history for questions and inquiries. Never dig through emails again, as the payment information is attached to the invoice.

 

It’s time to start now

You have the ability to harness the power of your network to improve the payables and receivables process for all. At the end of the day, our business clients come for affordable payments, but they stay for the network. Your business partners will thank you.

Have a business to refer? Contact us to find out about our latest referral bonus!

 

5 ways for small businesses to better compete with the ‘big guys’

As a small business owner it can be intimidating even thinking about how to compete with the big business that leads your industry. Every industry has at least one  giant with more spending power and resources than their competitors. It may seem that this giant company has the upper hand in both the physical and digital world, however, this does not mean there aren’t any areas in which you can outwit and outmaneuver your competition. It’s time to think creatively! Here are 5 areas where you can compete, and win, against a big business.

1. Be nimble

This is advice as old as David and Goliath, but that’s because it’s true. What small businesses lack in purchasing power, they make up for in agility. Meanwhile, big businesses take a very long time to change direction, so don’t be afraid to pivot!

Small businesses often have less red tape, and fewer processes in place, meaning when appropriate, it can be much quicker to implement change. Even if this tip refers to minor changes or innovations, small businesses have the upper hand here. Take advantage of new opportunities and iterate quickly, which is much easier for you. Always be sure to keep your ear to the ground, as businesses don’t often win off the biggest ideas, but simply being the first to market.

2. Excel in customer service

This is both a tip and a warning. Small businesses can have a true competitive advantage in the area of customer service, but a blunder in this area can have a much greater impact on your bottom line. Still, as a small business owner, you can build a much stronger, more personal relationship with customers. Many customers are willing to pay a little more to receive truly great customer service, and there are very few exceptions to that rule.

“The more advocates you have, the fewer ads you have to buy.” – Dharmesh Shah

3. Connect with your audience

A benefit of being a small business is your ability to connect with your audience digitally. This is related to customer service, as your ability to build a connection with individuals is enhanced, but this is not about answering customer complaints. Connect with your customer base by providing something for free! Maybe you’re a hardware store providing renovation tips, or a sports physio clinic providing exercise prescription. What you provide does not matter as much as the fact that you are providing something, and showing that you truly care about your customer base.

Social media platforms are perfect platforms to engage customers, but know your audience! If you are a personal trainer, Instagram is likely the best platform for you, but a business-to-business payment platform like Ablii is likely not going to to do as well on Instagram, so look to Twitter or LinkedIn if you play in the B2B space.

4. Play in a small ‘niche’ market

It is often the case that big businesses need to play in multiple spaces at once in order to grow, or even maintain their size. While large Consumer Packaged Good (CPG) companies like General Mills or Kelloggs saw success for years, we are now seeing dozens of small companies taking a bite out of their market share. The reason is, these smaller companies decided to focus on one product and do it really well, while the ‘big guys’ need to maintain their presence across many products. Let the big guys make decisions based on national, or even global sales trends while you focus on having a great understanding of your local or regional customer needs.

5. Reputation is everything

A business’ reputation does not rely purely on product quality, or customer service, which is why this rule relates back to everything we’ve discussed in this article. There are plenty of large businesses that are viewed as mediocre or worse, and while they may have been able to expand using pricing tactics or large marketing budgets, small businesses must rely on building a reputation for all-around excellence. As Benjamin Franklin once said, “It takes so many good deeds to build a good reputation, and only one bad one to lose it”, so keep reputation above all else.

 

 

 

 

 

 

The hidden costs of checks

 

Given that the B2B payments industry is valued at around $127 trillion, you’d be surprised to learn that the industry continues to use outdated payment solutions – like checks.

 

However, some business owners may not know that check payments have several hidden costs associated with them. There is also an inherent lack of security and efficiency that comes with using checks.

 

With this in mind, in this article, we’ll walk through some of the common hidden costs of checks and take a closer look at how check payments impact your business’ bottom line. We’ll also explain how you can effectively reduce costs by opting for a more secure business payment system.

 

3 hidden costs of checks

 

Despite the fact that sending a check can cost you around $20 per payment (and take around five business days to clear), paper checks are still the most common way for businesses to pay other businesses. And there are a few reasons why:

  • Familiarity. Checks have long been a part of the B2B payments ecosystem for most businesses.
  • Control. Business owners derive a false sense of control over their cash flow from personally seeing and signing every check.
  • Universal acceptance. Check payments are universally accepted, which make checks a reliable payment option that’s easy to issue and keep track of.

 

 

In addition to the outrageously high transaction fees, here are some of the hidden costs of checks that often go unnoticed:

  1. Labor costs. Labor costs – which include administration and accounting – are perhaps the largest expense businesses incur from managing B2B payment operations in-house. Everything from handling check approvals to payment exceptions, is a manual process that requires a significant time investment.
  2. Fees and distribution costs. Paper checks need to be distributed to vendors and suppliers, which means you’ll need to pay for mailing supplies. Additionally, you can also expect to incur all sorts of fees – such as processing fees – to get your payment through.
  3. Check fraud costs. Check fraud is the most common type of payment fraud, particularly in the B2B marketplace. In fact, according to the 2018 AFP Payments Fraud Survey, 74 percent of respondents reported experiencing check fraud.

 

 

It’s easy to see that check payments cost you more than just transaction fees, which in itself is considerably high, and, all these fees will undoubtedly affect your bottom line.

 

How check payments impact your bottom line

 

Businesses end up spending too much time with AR/AP management activities that involve manually handling check payments and approvals. Needless to say, this is painfully slow, prone to error, and keeps you from scaling your business. Additionally, failing to digitize your B2B payments system can expose you to fraud.

 

However, many banks continue to use systems implemented in the 1970s and have yet to build tools that (1) integrate with their existing systems and (2) help businesses streamline B2B payments. That said, the current state of check payments remains the same and undoubtedly impacts your business’ bottom line in more ways than one.

 

How to reduce check fees and costs

 

The easiest way to streamline B2B payments, thereby effectively reducing check fees and costs – is by switching over to an electronic business payment solution. Banks are slow to innovate in this area, but Financial Technology companies are recognizing a need for small business payment products.

 

Here’s how a business payment product can help you grow your bottom line:

  • Improve business payment management by letting you manage AR/AP activities from a single, centralized platform.
  • Reduce costs by eliminating the need to pay for paper checks, mailing supplies, postage, and processing fees.
  • Speed up payment processing times by replacing slow paper check payments with online payments.
  • Track payments and increase visibility into payables and receivables.
  • Customize payment approvals to avoid any unnecessary delays.

Secure and affordable business payments for SMBs

 

Ablii is a business payments solution for SMBs that enables companies to move money in a traceable, reconcilable, and affordable way.

 

Sending payments via paper check is a fairly long process and can cost you up to $20. Ablii makes it easy for businesses to issue payments by simplifying it down to a four-step process: select a contact, enter the payment details, approve the payment, and click the Submit button. Not to mention, you only pay $0.75 per domestic transaction and $5 for a cross-border payment

 

With check payments, your accounting department has to manually keep track of payment statuses and reconcile check payments, which are inherently prone to human error. Ablii automatically imports invoices from your integrated accounting software and uses data encryption and bank-grade security controls to make sure all payments (and payment information) that go through the platform are secure from fraud.

 

Paper check payments are rife with hidden costs and inefficiencies. One way to save money, automate accounting operations, and improve vendor relationships is by switching over to an online B2B payment solutions, like Ablii.

 

Do you agree that outdated payment systems – like paper checks – are preventing your business from growing? Let us know in the comments section below.

The cost of a wire transfer

We scoured the web and compared the prices of 5 major banks in both Canada and the U.S. to see who offers the best deal, and guess what? No matter the bank, consumers are still stuck spending an arm-and-a-leg for wire transfers. Plus, in most cases, banks also charge the recipient a fee to accept a payment! Needless to say, consumers in both Canada and the U.S. are not getting their money’s worth.

But good news! Starting this week, Ablii is offering businesses in both Canada and the U.S. cross-border payments for only $5. Yes, you read that right. Regardless of the amount you send, the payment costs only $5 (plus competitive exchange rates) and is completed online. No sign-up fees, no monthly fees, only pay when you use the platform. Goodbye wires, hello freedom. 

 

 

Hello. We are Ablii.

Hello from Ablii! We recently launched a self-service online platform for business payments. We know that business payments for SMB’s is an underserved space by the banks and new products are emerging as a result. So what makes us different?

Behind the scenes

Ablii is a new product by nanopay Corporation. nanopay was founded in 2013 and is privately funded, led by the Merchant Banking Division of Goldman Sachs. nanopay’s proprietary technology is designed to serve large enterprises and banks, and is also the infrastructure behind Ablii. This means that our compliance, security, and fraud prevention capabilities for Ablii are best in class.

We are advocates for change

Our competitors in the SMB space build high level apps that run on top of the local payment systems. They are complacent with the status quo, where payments can take up to 5 business days. Ablii is different. As a founding member of the Paytechs of Canada, it is our mandate to rally the government for faster payments, open banking, and increased competition. We are not just participants in the payments space, but driving change within it.

We want to grow with your business

Ablii is our solution for small businesses. As nanopay also offers customized business payment solutions to large enterprises, as your business grows from small to global enterprise — we will be there every step of the way.

We listen to deliver what your business needs

The initial release of Ablii is very simple. We offer domestic payments in Canada, soon to be live in the U.S. Over the next few months, we are here to listen. We want to hear from business owners, bookkeepers, and accountants and build the features that matter most to you. Your feedback is the most important part of our equation.

We are Ablii. We are new, and we are not perfect. We will continue to grow, continue to add features, and continue to rally for change. That being said, we are looking forward to the journey and hope that you will join us in changing business payments for the better. Join the conversation at https://ablii.com/contact-us/.

 

 

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