Going Green with Electronic Payments – Part I

Marcel Santiz
Manager – Treasury Services Operations
Masco Corporation

Part I:

If you are reading this, you are, most likely, familiar with some of the reasons to “go green” and most of the reasons to migrate to electronic forms of payment.  The fact that you’re still reading probably means that you haven’t gone green or electronic or that you’ve only been partially successful at one, or the other, or both.  If you are a treasury or finance professional, you most likely already know that there are many good reasons to migrate to electronic payments.  Despite this, many companies have not done so.

If you are one of those firms, a push toward “green” in your company can open the dialogue that you may have had difficulty with otherwise, particularly in these times of cutbacks.  Regardless of the true reasons that your company has an interest in “going green”, there are real cost savings to be had in making treasury of finance more environmentally friendly.  In the information that follows, I detail some of the ways that you can help the Earth, and do it, partially, by converting to forms of electronic payments.

• Paper checks: environmentally unfriendly
  • Aside from the obvious use of paper and petroleum used to make check stock and envelopes with windows and possibly self-stick, there are other impacts on the environment that are less obvious such as:
    • Toner use
    • Latent power draw – your printer is probably on 24 hours a day and constantly drawing power
    • Heat – laser printers create a lot of heat due to their fusing units
    • Window envelopes are often not recycled by the recipient even if they do so with other paper products
    • Excess auto pollution if an employee drives your check run to the post office

• Electronic payments: environmentally friendlier
  • Electronic forms of payment include ACH, Fedwire, Purchasing Card and Virtual Card
  • MICR Laser printer only turned on when needed for the occasional emergency or manual check
  • No other resources used, such as envelopes other than on an exception basis.  If your remittance data is available in multiple file formats rather than just a text e-mail, you also reduce how many vendors will print the remittance data in their office
  • Side benefits: Reduces or eliminates escheatment and fraud on your accounts
  • Caveat: You may feel that you do not have the personnel, resources or systems security to achieve these goals.  If so, consider outsourcing the function and the conversion of vendors.  Outsourcing or software-as-a-service offerings reach your “green” and efficiency goals while still reducing your costs by approximately 50% or more over printing your checks in-house.  In the case of Purchasing Cards and, especially, Virtual Card payments, rebate structures translate into income instead of expense

Are you thinking of helping your company go green?  Is your company considering migrating from check payments to electronic?  I’d like to hear from you.

Stay Tuned for Part II….