Payments Efficiency

Small Business Payments Toolkit – Top Five Takeaways

Small Business Payments ToolkitIn early April 2015, the Business Payments Coalition (Off-site) released the first volume of the Small Business Payments Toolkit (PDF). The toolkit is intended to encourage the adoption of electronic business-to-business payments and remittance information exchanges by small businesses. The Remittance Coalition is a group of payments industry players (including Federal Reserve Banks) that works to increase the efficiency of business-to-business (B2B) payments made and reconciled by US businesses. The toolkit provides a host of useful information that can be leveraged by financial institutions, vendors, small businesses and anyone interested in learning more about payments.

Here are our top five takeaways from the Small Business Payments Toolkit:

  1. Adopting B2B electronic payments and remittance information exchanges will make life easier for small business owners
    1. Although it may not currently be a top priority, choosing to enhance the efficiency of your payments process can make life easier in a number of ways:
      1. Increased ease of paying taxes, bills and your payroll
      2. Increased ease of receiving payments for businesses that bill clients on a recurring basis
      3. Higher savings from reducing the labor and administrative costs needed to process payments and remittance details
  2. Learn about the various types of payments fraud and tips to help avoid fraud
    1. Educating all levels of your organization on basic payment security practices can go a long way towards avoiding fraud and data breaches. Some payment security best practices include:
      1. Use strong passwords with lengthy combinations of letters, numbers and special characters and make sure to change them often
      2. Dedicate a PC to be used only for online banking activities
      3. Use dual control for origination of ACH files and wire transfers. This means assigning roles to two different individuals so it is not possible for one person alone to complete a transaction
  3. Small businesses that accept ACH payments will benefit from a slew of increased business opportunities
    1. Accepting ACH payments opens the door for new opportunities that include:
      1. Increased business retention
      2. Reduced fraud – ACH payments are safer than checks
      3. Ability to work with companies and government entities that exclusively do business with those accepting ACH payments
  4. When looking to improve the efficiency of your payments processes, choosing the right financial institution is key
    1. Be proactive and contact banks about payment needs; don’t expect them to come to you. Specifically, you should seek out financial institutions that offer services like:
      1. Small business-focused online banking with robust bill presentment and payment services
      2. Services to set up small businesses as ACH receivers and originators
      3. Fraud monitoring and prevention tools, including alerts
  5. Contrary to the name, this toolkit isn’t just for small businesses
    1. While small businesses are the toolkit’s primary target, small business bankers, advisors and anyone else interested in learning more about B2B payments will also find this toolkit helpful. Some of the great resources within the document include:
      1. An explanation of the different types of payments (Page 3)
      2. An explanation of how the ACH network electronically moves money and data (Page 8)
      3. Fraud prevention and mitigation tips (Page 19)
      4. A “resource” section full of links to external sites where interested parties can learn more about the specific toolkit information that most interests them (Page 30)

We encourage you to take a peek at the Toolkit (PDF) — it’s a quick and easy read for everyone! Share your top takeaway from the Small Business Payments Toolkit below.