*This article was updated by Matthew Bruner on 11/21/2023.
Explore ways to pay for your alcohol electronically and find the solution that best fits your business.
In the digital age, there is no shortage of ways to streamline your business and keep employees safe. Using internal newsletters and emails to communicate proper PPE and cleaning procedures, implementing simplified electronic payments from customers, and even moving to digital menus or online ordering platforms may be just a few ways you’re already using technology to improve your alcohol management. But are you utilizing technology to its greatest potential in other areas of alcohol management operations?
As you begin to explore safer technology that can drive efficiency and improve your business profits, it’s vital to understand and compare the various options available for different facets of the business. For example, for alcohol invoice payments, several touch-free choices are available, from escrow accounts to EFT payments – but only one brings true visibility and better control to the beverage alcohol category.
Self-initiated payments are those that businesses can set up and manage on their own, like escrow accounts and ACH payments. Escrow typically requires retailers to deposit a predetermined amount into a separate bank account held by each distributor (usually about four to eight weeks’ worth of purchases). These “pre-payments” keep retailers in compliance with same-day or COD payment terms legally; however, individual invoices are typically still paid with a check mailed from a corporate office or accounting team. By the time escrow accounts are established with each distributor, thousands or even tens of thousands of dollars may be tied up, severely restricting available cashflow. Plus, while the escrow account is contactless, a manual payment is still required for each invoice.
ACH, or Automated Clearing House, is a financial network used to initiate electronic payments and money transfers in the United States. These contactless payments are often referred to as “direct payments” and are made by setting up a connection with each distributor’s bank account. Payment is issued by requesting that the bank initiate an individual transfer into a specific distributor’s account.
While the touch-free transfer is electronic, the process to initiate payment is again still manual, requiring a separate setup for each distributor. Direct payments can also take several days to process, putting retailers at risk of falling out of compliance with payment terms if transfers aren’t initiated on time. This becomes even more complex when locations span multiple states, where payment rules and regulations may differ significantly.
Another option for contactless payment is electronic funds transfer, or EFT, facilitated by invaluable industry partners like Fintech. This contactless payment option is the only choice providing automated payments while simplifying compliance and improving clarity into total alcohol spend. EFT makes each invoice payment automatically with funds moved directly from the retailer’s account to the distributors through the Federal Reserve. The distributor uploads an invoice, and the exact invoice amount is paid on the due date listed on the invoice without Fintech ever taking title of the funds. This not only removes the stress and headache of maintaining compliance, but it also improves the retailer’s cashflow. All payments made through EFT are done in compliance with state regulations regarding alcohol invoices. After the payments are made, automatic reconciliation files are sent to retailers to help them update their books.
Electronic payments allow for fast and efficient transactions, enabling both parties to make and receive payments promptly. This saves time for retailers who can pay their distributors faster, ensuring smoother business operations and allowing distributors to focus on other essential tasks, such as making additional deliveries.
Because EFT payments are electronic, retailers also often gain access to a digital invoice management system, allowing them to view line-item invoice details online. This clarity empowers retailers to quickly investigate products and pricing without calls or emails back and forth with their distributors. Both parties gain valuable insight via these payment-tracking capabilities to see if funds are being utilized effectively.
Through Fintech’s digital invoice management portal, retailers can also request credits for specific invoices, view pending invoices, and even access insightful purchase reports highlighting missed discounts and opportunities for improved buying behaviors. This invoice data is also automatically integrated into back-office or accounting programs, ensuring the accuracy and reliability of financial data. This eliminates the possibility of human errors that tend to occur when keeping manual records.
Use EFT Payments for Alcohol Invoices With Fintech
Nearly thirty years ago, Fintech saw a great need for a simplified and streamlined payment method – that’s why we led the modernization of payment within the alcohol industry by introducing EFT payments as a solution for all 50 states. Today, we continue to develop touch-free technology to meet industry needs, and one out of every four retailers nationwide trust Fintech for alcohol management with invoice payments and data. Interested in learning more about the benefits of EFT payments? Contact us today!