Collecting checks has been a steady state process for decades in the insurance industry, but it doesn’t come without its challenges. Processing cash and checks requires non-trivial personal time and expense to the business while keeping agencies from reconciling payments for cash on the balance sheet more quickly.
Fed up with these challenges, some agencies have begun incorporating digital payments into their businesses. However, it behooves all agencies to do so because, according to McKinsey, nine in 10 people use a form of digital payments.
Why Invest in Digital Payments – and Why Now?
There are many benefits of adopting digital payments into your business, including:
Delivers a Better Customer Experience: You can differentiate your business with an online payments experience that allows access via multiple channels (links, portals), provides payment method choice, offers next-day funding, and has no volume limits.
Eliminates Low-Value Tasks: Native integration into the core management system offers true accounting automation, which reduces operational overhead by automatically applying credits to debits once a payment is processed. This allows staff extra time to focus on new and renewal business servicing.
Improves Security and Compliance: Online payments solutions allow you to tailor security and user permissions uniquely to your internal operating structure, ensuring users have visibility only to the accounts and payments pertinent to their role. Payments are automatically applied, and activities are synced and tracked to support the appropriate auditing method and meet compliance requirements.
Breaking Down How Digital Payments Work
To understand how digital payments solutions can play a role in your agency’s operations, we’ve developed a simple framework to explain better what happens during each stage of the collection process.
Introducing C.A.R.D. – An Overview of the Payment Journey
Unlocking the Power of Payments
Collect: This phase covers Invoice and Billing, the Channels from which a payment link can originate and also the notifications that occur both prior to a payment and after a payment is “Collected.”
Apply: After a payment is made, it is then credited appropriately. It will either be left on the client’s account or added to a specific invoice, policy, line, etc. This is where we focus on how those credits (payments) get “Applied” within the system.
Reconcile: After applying a payment, “Reconcile” is where an agency trues up the cash balances, payment deposits, and management system receipts.
Disburse: Once the general ledger is reconciled, “Disburse” is where the payments are sent to the appropriate parties (most often insurers), finalizing the payment journey.
Want more insights about digital payments? Read our Cashing In on Digital Payments eBook to learn more about how digital payments work and what factors to consider when selecting a digital payments solution for your agency.