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How could my business benefit from the use of Electronic Funds Transfer?
Home » Investing » Electronic Funds Transfer » How could my business benefit from the use of Electronic Funds Transfer?As is the case for consumers who frequently use EFT, the most obvious benefit for businesses is the potential convenience offered by EFT. As an example, contrast traditional employee check disbursement with an automatic EFT deposit. From an employer’s viewpoint, the EFT transaction is significantly more convenient, and the same is true for the employee. Once the required information has been provided to the banks of the employer/employee, there is no need for either the printing of the employee’s check or the manual distribution of that check. From the employee’s perspective, there is no longer a need to pick up the check, nor is it necessary to drive to the bank in order to deposit the check. Automatic deposits, however, are just one form of increased convenience for business owners. That convenience can also include easier payment of creditors and faster payment from debtors. Other potential benefits include:
• Transaction speed: Traditional paper transactions are frequently quite slow, especially if payments must be mailed over any great distance. Because only the transfer of information between computers is involved, EFT eliminates those distances. Your payments are more likely to be timely, and you’ll receive money owed as quickly as possible.
• Less manpower: Depending upon the size and nature of your business, EFT may also free some of your employees from payroll duties. The creation, printing and distribution of employee earnings, utility payments and creditor bills takes time, but EFT automates much of that work.
• Increased Security: We’ll see below that this is also a potential negative to the use of EFT, but in many cases the transfer of electronic funds is a more secure form of payment than traditional methods. Business owners that mail checks must consider the possibility that those checks may be lost or tampered with in transit. Immediate electronic confirmation of payment receipt through EFT serves to eliminate some of those concerns.
Related Electronic Funds Transfer Articles
- What is Electronic Funds Transfer?
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- How could my business benefit from the use of Electronic Funds Transfer?
- Does the use of an Electronic Funds Transfer system present any risks or disadvantages for my business?
- Is Electronic Funds Transfer right for my business?