By Victoria Flynn, RBS.
When the economic going gets this tough, it is crucial that charities draw on their banking relationships to explore more efficient and effective ways of attracting donations and managing their transactional banking requirements.
Making improvements need not involve reinventing the wheel. To some extent, it simply means working smarter using existing processes, such as processing a payment using the faster payment system1 instead of the more costly CHAPS route. However, technological developments, including automation, e-invoicing and mobile payments, also offer opportunities to be explored.
Embracing automation
Digital technology continues to transform our world and adapting to emerging realities also demands change.
Recent research undertaken by the UK's Payments Council into how charities make and receive payments found that 90% still use cheques to make payments, while 82% receive payments by cheque.2 Processing cheques remains costly and time consuming. Additionally, there is a risk that charities that fail to move with the times will miss out on a new generation of potential donors who have never even signed a cheque.
Put simply, automated payment solutions are the way ahead and educating donors about the benefits is vital to charities. The good news is that banks and other digital technology providers have combined forces to develop numerous automated tools that are more efficient, cost effective and donor friendly than cheques. RBS offers a range of proven payment instruments particularly suitable for charities and donors alike. These include direct debits, standing orders, BACS, card processing, internet and telephone banking, among others.
E-invoicing, another automated solution, can help charities make significant process improvements and cost savings. When sending or receiving a paper invoice, the processing cost ranges between £9.20 and £14.50. Switching to e-invoicing can reduce this overhead by 60%.3
Dedicated support
Charities should take the opportunity to review their in-house accounts payable and receivable processes and banks are here to advise and educate accordingly.
Upwardly mobile
Smartphones and tablets will continue to have a profound impact on the handling of finances. RBS is actively using mobile technology to innovate new tools to give charities faster, more efficient and cost effective ways to manage, monitor and report their finances and receive donations.
With the popularity of mobile payments set to rise, the UK Payments Council is looking to introduce a national mobile payments scheme to facilitate P2P (person-to-person) and P2B (person-to-business) transactions. VOCA-Link has been appointed to build the infrastructure with a view to having the new scheme launched in 2013. We at RBS have plans to add free-form faster payments to our suite of applications.
RBS continues to support charities that choose to use cheques. But our ultimate aim is to work in partnership with charities to ensure they embrace automation, drive efficiencies and deliver maximum benefit to the causes they support.
Footnotes
1 Using faster payments system at RBS is more cost effective where payments are below £100,0 00.
2 Payments in Focus, A report on UK charities and community organisations, Payments Council, Januar y 2012 .
3 Billent is 2012. Overhead reduction percentage is typically based on volumes over 30,000 (invoices) for either accounts payable or receivable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.