Best Way to Pay Vendors for a Small Business: Match the Method to the Payment

Disclosure: This article was published as part of a paid partnership with OnlineCheckWriter.com, a Zil Money platform. The author is an independent contributor.

The best way to pay vendors for a small business depends on the vendor, the payment deadline, the information available, and the cost of the payment method.

There is no single method that works best for every supplier. A recurring vendor may prefer ACH. Another supplier may still ask for a check. A time-sensitive business payment may require a wire. In some eligible situations, a business may want to use a credit card as the funding source while the vendor receives another payment type.

The better approach is to choose the payment method for each vendor rather than force every supplier into one process.

ACH Works Well for Many Recurring Vendors

ACH is a common way to move business payments between U.S. bank accounts.

Nacha describes the ACH Network as supporting Direct Deposits and Direct Payments for businesses, consumers, and government entities. ACH is commonly used for payroll, bill payments, account transfers, and business payments.

For a small business, ACH can make sense when a vendor provides the required banking information and expects recurring electronic payments.

The business should still confirm the recipient information and understand its payment provider’s fees, processing schedule, and cutoff requirements.

Checks Still Solve a Real Vendor Problem

Some businesses continue to work with vendors that want checks.

A small business may print the check internally or use a service that prints and mails it. OnlineCheckWriter.com currently supports check printing and check-mailing workflows alongside other payment methods.

A mailed check should not be treated like an electronic payment. Postal and carrier timing still affect when the vendor receives it.

For a vendor that accepts checks but the payer does not want to mail a physical check, OnlineCheckWriter.com also offers its own eCheck workflow. In OnlineCheckWriter.com terminology, that eCheck is a printable PDF check sent electronically to the payee.

It should not be confused with ACH.

Wires Fit Different Payment Needs

Wire transfers use a different payment rail.

The Federal Reserve describes Fedwire as supporting mission-critical, same-day transactions among participating financial institutions, businesses, and government agencies.

That does not mean every customer wire through every provider is guaranteed to arrive the same day. The business still needs to meet its provider’s requirements and applicable cutoff times.

Wires may be considered when the amount, timing, or transaction requirements make that rail appropriate.

A Credit Card Can Sometimes Be the Funding Source

A vendor does not necessarily have to accept credit cards directly for an eligible business to fund a payment by card through a payment intermediary.

OnlineCheckWriter.com’s current platform describes workflows where the business uses a credit card while the supplier receives a check, ACH transfer, or wire.

This adds another payment option, but card funding has fees and eligibility conditions. Rewards are controlled by the card issuer and should never be assumed or guaranteed.

The business should compare the current processing cost with the reason it wants to use the card.

Keep the Methods in One Payment Process

A small business that pays ten vendors may need three or four different payment methods during the same month.

That is where a multi-method platform can be useful.

OnlineCheckWriter.com currently combines check printing, mailed checks, ACH, wire transfers, card-funded payments, invoicing, and other business-payment functions within the same platform. OnlineCheckWriter.com is powered by Zil Money and identifies itself as a financial technology company, not a bank.

The goal is not to prove that one payment method wins.

The best way to pay vendors for a small business is to match the payment method to the supplier’s requirements while considering timing, current fees, approval controls, and accounting records.

A vendor that accepts ACH may be paid by ACH. A check-only supplier may still receive a check. A qualifying urgent transaction may call for a wire.

The strongest vendor-payment process gives the business enough choices to make that decision payment by payment.

OnlineCheckWriter.com – powered by Zil Money, is a financial technology company, not a bank. Banking and money movement services are provided through partner financial institutions and licensed service providers. FDIC insurance coverage applies only to eligible deposit products and accounts, and is subject to applicable terms, conditions, limitations, and requirements. Additional information regarding partner institutions, products, and services is available in the applicable terms and agreements.