Digital Payments

Everything has gone digital these days. There has been a steady rise in virtual, shaping the future of business from operations to consumer-driven trends. We’re talking about virtual events, remote work, and of course, digital payments. The digital payments market is projected to grow at an impressive 19.4% compound annual growth rate (CAGR) between 2021 and 2028. This growth is partly due to the rise in e-commerce and an explosion in internet-based activities worldwide. Even banks are hopping on this bandwagon. According to a survey done by the Bank for International Settlement, 80% of central banks run some digital currency initiative for individual and corporate cases.

So, What are Digital Payments?

Digital payments are transactions that happen through online or digital platforms. Examples include wire transfers, virtual cards, and digital wallets.Digital payments offer a secure, auditable, and automated way to transact. In business, adopting digital payments means that your accounting department can access accurate information while enabling real-time transparency into how your organization spends money. Think of it as a way to allow you to see when and where your money is going and use the data to develop strategies that finance teams can conform to.

Benefits of Digital Payments

Digital payments offer several advantages, including:

• Security – Digital payments are significantly secure. For instance, card numbers are connected to specific payments instead of the traditional card. Further, transactions are limited to the pre-approved amount.
• Control – By leveraging digital technology, you can limit payment methods to specific, pre-approved transactions. That way, you can control how your employees spend money allocated to them.
• Visibility – By allocating separate card numbers for every purchase, your accounting department has better audit trails and data. Plus, they can monitor purchase requests and keep an eye on expenses in real-time instead of waiting till the end month.
• Less manual work – If you haven’t adopted digital payments, your finance team will probably fax purchase orders manually, mail checks, and go through paper receipts.

On top of that, your team is manually reconciling and feeding all this data into your general ledger.Digital technology minimizes manual work by unifying the entire process into an automated workflow and seamlessly passing the information through to the accounting system.

Why are Businesses Still Making Paper-based Payments?

Sure, digital technology can go a long way in improving relationships between trading partners. Still, many businesses opt for paper-based transactions such as checks, especially for one-off or periodic payments. However, this shouldn’t be happening. You can fully digitize your business by implementing a set of solutions. That way, you can migrate from paper-based transitions to an all-inclusive digital payment infrastructure. One way you can shun paper is to implement electronic document exchange.

Electronic Document Exchange as a Driver of Digital Payments

Going electronic is a crucial step in business digitization, enabling you to enjoy the full benefits of digital payments. There’s enough proof that adopting an electronic document workflow can help streamline a business’s operations, enable cross-border trade, increase transaction security, save the environment and money. Further, investing in an e-document solution can help with compliance. This comes as the number of governments using electronic documents in business transactions grows. While you may want to digitize your business for various reasons, using transactional electronic documents will be a necessity in the future for virtually all companies worldwide.

What is an Electronic Document?

An e-document is any business/transactional document exchanged between trading partners in a structured electronic format and means. Unlike PDF or image files, an electronic document is machine-readable. The exchange of an e-document happens through software or a cloud-based solution instead of an email. Types of e-documents include:

• Invoices of various types
• Purchase orders
• Correction invoices
• Credit/debit notes
• Payment instructions
• Goods receipt notes
• Dispatch advises

Electronic Invoicing and Business Digitization

Choosing one electronic document over the other depends on your business operations and local regulations. If your organization has offices in different countries, it is important to note that government regulations may vary from country to country.

An electronic invoice (e-invoice) is one of the most regulated e-documents. If done right, e-invoicing can offer an invaluable opportunity to streamline how you transact with your customers. Also, it allows you to digitize your financial process while creating room for easy, efficient cross-border digital payments. Further, electronic invoicing enables you to implement broader digital transformation geared toward creating a more efficient purchase-to-pay process and digital supply chains. Technical advancements and legal requirements on e-invoicing are driving the adoption of e-invoices in countries like Serbia, the United Kingdom, Canada, and New Zealand. The beauty of it is that electronic invoicing implementation is a lot easier – thanks to networks such as PEPPOL – and you can achieve a positive ROI soon after adoption. Plus, you can integrate an e-invoicing solution into your ERP system without disrupting accounting processes and infrastructure in your business.

Electronic Invoicing Breaks the Silos and Overcomes Isolated Systems

Implementing electronic invoicing is a viable strategy to kickstart sustainable and smart digital transformation. Also, it enables an organization to break away from isolated solutions for companies with a traditional corporate structure. Adopting e-invoicing requires cooperation between all supply chain departments from purchasing to finance, IT, and suppliers.

When all parties are clear on optimizing the benefits of digital transformation through active participation, breaking away from silos becomes easier. That way, the CFO, CIO, CPO can achieve their common goal of cost reduction, compliance, and control.

Conclusion

Digital transformation is changing how businesses operate. It enables organizations to streamline processes and workflows. At Unimaze, we believe in business digitization in all forms. We’re specialists in proposing global technological solutions for electronic document exchange and e-invoicing to facilitate swift commercial transactions between trading partners sustainably and efficiently. Whatever your company’s vision for the future is, it must include digital transformation to help you remain competitive. We can help you digitize your business. Book a meeting today.