Robert Burns, in one of his well-known poems, ends it with this:
“O would some power with vision teach us
To see ourselves as others see us!
It would from many a blunder free us.”
Those who process payables sometime forget what those who process receivables need to see. In addition to receiving the money, they need to know exactly what is being paid. Is it payment on account, payment of certain invoices, or a government payment where specific information must accompany the payment? Has a discount been deducted? If this type of information has not been provided with the payment it must be obtained by other means, often a phone call to the payer.
Another problem for the accounts receivable department is receiving a string of credits to a bank account and numerous email notifications that a payment has been made. Better is the consolidation of the payments so that one bank deposit and one email equal the deposit covers numerous payments.
TelPay has based its payment system on its ability to see both the payment process and the receivable process. As electronic payment systems evolve, the efficiencies of the systems will grow with the ultimate aim being to have all transactions automatically flow from the bill payer to the biller.
A discussion taking place among people involved in improving the payment system is whether the emphasis should be on instant or same day credit of payments. The answer is that electronic payment systems and rules should have the flexibility to provide both methods depending on the type of billing the business engages in.
Businesses such as utilities that bill monthly will likely want a daily file of payments that can easily and accurately be imported into their accounts receivable system. They want one file of payments for the day and one credit to their bank account to cover the payments.
Businesses that must deliver their goods instantly, on the other hand, must get their payments at the time of delivery. Retail sales would be an example. They reconcile their bank by matching their sales to their deposits at each of their sales points. Today, they get instant payment by cash, credit or debit card. What they want is less expensive payment mechanisms than credit cards especially. Cash and debit cards fill that requirement now except in the case of internet purchases. We foresee the digital wallet will be able to meet that need for instant, guaranteed funding of such purchases.
The Department of Finance has the aim of increasing competition and innovation in the payment field. Telpay hopes to continue to aid in achieving those goals.
On Thursday, September 13, 2018, Telpay hosted a panel discussion at the Institute of Professional Bookkeepers of Canada (IPBC) National Conference in Calgary. The panel discussed the changes to the rules and procedures regarding processing payments in Canada. FinPay, a committee set up by the Department of Finance, has been working on it for some time. John Zajic, Vice President, Corporate Policy, Telpay, is a participant on the FinPay advisory panel.
Same Day Payments
We may see initial results of their work this month. We understand that an added daily exchange between banks will begin this September. This one change will be of great benefit to business generally and to Payment Service Providers especially. The proposed 9:00 PM EST exchange will mean, for example, that funds transferred to Telpay during the day can be paid out and credited to the intended recipient the same day. Deadlines for payroll payments, for example, will likely be shortened one full day. Anyone involved in payroll processing understands how beneficial this is. However, there are other benefits as well. Errors and adjustments may be reduced. We can’t say precisely how it will be implemented but you can be sure that Telpay will do so as soon as possible with payroll being our priority.