3 Reasons to Use Electronic Signatures for AP Check Payments

As much of our business has moved online, electronic signatures have become standard practice for signing waivers, contracts, or other legally binding documents. You have most likely used DocuSign, Adobe, or a similar platform for both personal and work-related projects.

Electronic signatures are also well-suited for financial functions. For Accounts Payable departments, sending checks may still be a part of your vendor payment strategy. Adding an electronic signature solution to your Enterprise Resource Planning (ERP) or financial accounting system can automate one of the most time-consuming aspects of the check printing process.

From Manual Hassle to Digital Ease

For supervisors or executives accustomed to hand-signing checks, implementing an e-signature process may be an uncomfortable transition. Perhaps it feels like you have less oversight if you don’t get eyes and hands on physical payments; or, you worry about fraudsters accessing your digital signature.

While those fears are understandable, an effective electronic signature platform provides greater transparency and security than the typical manual procedures.

In our consulting and implementation work with customers, we’ve heard tales of AP staff shipping stacks of checks back and forth via FedEx to get “wet signatures,” or printing out stack of invoices, clipping them to checks, and dropping the paper pile onto a signer’s desk.

Why should your AP department move away from these practices? Here are the three major benefits, regardless of the volume of payments your company handles:

1. Efficiency Gains

Sitting down to review a stack of checks - and supporting invoices/documentation - takes time that could be spent on strategic business initiatives. Instead of repeatedly signing your name week in and week out, or requiring a staff member to stamp individual checks, create your signature only once and upload it, in a secure manner, to your ERP system.

Signatures should be integrated with a digital approval workflow, so that you or an authorized user can review and approve payments before checks are released for printing.

2. Faster Payment Cycles

Approvals and payment sign-off are where many AP teams see a bottleneck in their workflow. When signatures are an integrated part of a digital workflow, AP staff don’t have to wait for a signatory to be available or spend time stamping approved payments. Furthermore, signers who are also approvers can leverage email or mobile capabilities to oversee the process remotely. Checks can then be put in envelopes and mailed right off the press!

3. Fidelity and Security in the Payment Process

When using electronic signatures for checks, signature files are loaded, stored, and made available from within your ERP system. To mitigate risk, a good electronic signatures solution employs best practices to store signature files in an encrypted manner, which are only accessible to trusted administrators, and integrated with a digital approval workflow.

• Encryption ensures that signature files are not exposed to unauthorized users in your organization. Some ERP systems allow you to add signatures to documents or payments, but require image files to be manipulated at the time of printing, which could potentially open the door to fraud.
  

• By implementing separation of duties (SOD) – the principle that no user should be given enough privileges to misuse the system on their own – in your ERP system, you can designate only a select few individuals in your organization with the ability to upload signatures and configure the rules to display them on the face of the check.
  

• A digital approval workflow can be implemented to request, notify, and complete payment approvals so that payments are reviewed by the appropriate individuals before checks are printed and remitted to vendors. This process has shown to be much more secure than shuffling papers manually between different staff within your organization.

Adding electronic signatures to your Payable process is a significant change that can have a huge impact on your organization, your AP team, and your vendors.