In today’s tech-enabled, data-driven, globally connected world it is still mind boggling how many businesses still pay for goods and services by check. According to a recent Goldman Sachs report, paper checks account for at least 50% of B2B payments. When you quantify the overhead involved in processing a check, coupled with human error, checks are costing businesses $550bn in direct expenses and inefficiencies.
Leaving Money on the Table
As Technology for beer payments evolve, the costs of processing checks and money orders are enormous. With payment laws unique to the alcohol industry, payment often times must be received COD. This requires the driver to wait for payment before they can leave the retailer location. If you quantify the time it takes to wait for that paper check, factoring in the cost of the driver’s time, plus the limited amount of deliveries that can be made and then manually processing the paper check; the total cost could be exponentially more than the average $8 a check Goldman estimates.
To further expand on this notion, the most expensive stops turn out being the least profitable. These are typically independent retailers with 1 to 10 location establishments where the owner is the cashier and the back door clerk is the one that has to write the check. Usually, the alcohol orders are smaller in comparison to large retailers and the wait time is longer.
It's Time for Alcohol Payments to Catch Up
There are payment providers in the alcohol space that automate the entire payment collections process. When a distributor signs up for the right payment service, the ROI is immediate. For a small transaction fee, the distributor immediately receives significant cost savings that they can reinvest in sales or other parts of the operation. By moving to an electronic solution for beer payments, what was a laborious, manual and costly process turns into an automated and cost-effective process. EFT providers have interfaces to all the major route accounting systems. These b2b payments interfaces allow machine-to-machine payment transfer which eliminates manual intervention and human error. Additionally, the bank reconciliation process is much more efficient since all deposits are settled at once since the EFT comes from one source versus paying by check or money order. This allows drivers to handle more deliveries and distributors to deploy less trucks on the road.
There are Solutions
Beer distributors can utilize EFT payment providers to drastically reduce their costs. A direct EFT program where the distributor can bring on all their independent retailers can be very powerful. This puts the distributor in direct control of their cost savings. Taking this approach only requires the retailer to give their bank account information.
iControl's EFTDirect™ program eliminates cash and check payments by providing EFT services at a cost that allows you to scale and service all of your customers.
Visit our website to learn more about how iControl is revolutionizing mobile b2b payments for Beer, Wine and Spirits: