When it comes to payables solutions, one size does not fit all.
Each type of e-payment plays a specific role in reducing expenses and directing capital, so it's important to understand what the differences are and when to use them.
1. Automated Clearing House (ACH) payments
Advantages: ACH payments are easy to manage and will soon offer same-day processing in addition to the existing next-day processing.
Best for: Automated and recurring payments like direct payroll deposits, taxes, bill payments, vendor payments, and subscriptions.
2. Wire transfers
Advantages: Wire transfers are the fastest payment solution available — often near real-time within the U.S. (deadlines apply). Wires transfer also can't be canceled by the sender without explicit permission from the receiver (a big difference from ACH).
Best for: Large payments that require greater speed and a guarantee of funds, international payments.
3. Commercial cards
3.1 Travel and entertainment cards (T&E card)
Advantages: T&E cards provide detailed transaction data that simplifies reconciliation and expense management, and can be used to negotiate with suppliers for discounts on airfares, hotels, and car rentals.
Best for: Gaining more control and insight over travel and entertainment spend.
3.2 Purchasing cards (p-card)
Advantages: P-cards can reduce administration costs, eliminate the need for paper invoices and purchase orders, and increase working capital.
Best for: Purchasing goods and services, repetitive non-direct spending, and buying inventory.
3.3 Virtual card numbers (VCN)
Advantages: VCNs can optimize cash flow and working capital; provide higher levels of control, efficiency and security while avoiding the risks associated with outdated payment methods.
Best for: Post-invoice accounts payable payments, online payments and real time payments.
Recalibrating your e-payments program
With a deep expertise in your industry, SVB can help you customize and implement an e-payments program to fit the needs of your organization and manage your supply chain using a variety of solutions — from payment methods like ACH, wire transfers, and commercial cards, to payment channels including online bill pay, electronic accounts payable, and direct file transmission.
Please contact your SVB Global Treasury and Payments Advisor to learn more and get started.