Using a Grants Payment Management System for Seamless Distribution of Funds

There’s no greater resource than time. The 20 to 30-minute drive to the post office, or the minutes you stand waiting in line once you’re inside – each check will cost your team precious time. Even if you drop them in the mail directly from your office, those items on your team’s to-do list such as “write the check,” “buy stamps,” or even “double check address information” are things of the past with the help of a payment management system.

First time, now money - grant payments via check can be pretty costly when you add it all up! In the United States, printing and issuing paper checks will cost an organization anywhere between $1 and $26 with an average of about $6 per check. When you deliver a physical check, you have to account for direct costs like the actual check and shipping and indirect costs like your team’s manpower and time.

Using a payment management system means that you’ll be switching to something known as Automated Clearing House (ACH) transactions. To process a transaction, a check that could cost that $6 price tag could drop to half that amount.

Related: Also read our post ACH vs Checks vs Grant Payment Systems: Which is Best to Distribute Grant Funds?

Cybercrimes might blow up your newsfeed, but the truth is that fraud related to old-school checks is still the primary target of bad actors! Even worse, check fraud is on the rise.

According to independent news organization “The Conversation", an average of 1,325 stolen checks were put up for sale every week during October 2021. This was more than double what the group saw in September 2021, when the average was 634 a week, and triple the 409 average in August 2021. 

Fraudsters may directly steal checks from mail drop-off locations, or while they are in mid-delivery. Provided that you choose an encrypted grant payment software, your digital payments will be in much safer, less risky hands.

To make matters worse, once a check is cashed, you have virtually no proof that the intended party didn’t receive it. When you switch to digital payments, you can rest easy knowing that your grant checks are going to the right people.

At the end of the day, your organization strives to help people. You can ensure that your grant recipient(s) gets the funding that they’ve been awarded in a convenient form and in a timely manner. When they have to wait on a payment to arrive and then a check to clear, it can cause hiccups in the things they are trying to pay for.

If instead, the grant monies are deposited directly to their bank accounts, not only is there a lower risk of fraud, but they will receive the money faster. Whether your grant recipients are paying for school or have their own payments to make to vendors working on what they needed the grant for - receiving a digital payment ensures recipients will be able to use the funds that much sooner.

The bank that debits an amount from the payer is known as the issuer bank. Then, there’s the acquirer bank which credits the amount on the receipt back to the payee’s accounts. This is why both parties require their respective bank accounts and online banking method.

Unfortunately, when grant organizations are not using digital payments, one of the common challenges in distributing grant funds is that the money doesn’t always get to the intended destination. A payment management system not only helps reduce the likelihood of fraud, but it also ensures your organization can create payment reports for transparency and accountability.

Here’s how grant payment software can make life easier for you and your team:

If you recall, writing a check will cost an organization on average about $6 per check. These expenses add up quickly. Just sending 30 checks per grant period could mean paying upwards of $180. And, that doesn’t even address the time and energy required to approve the checks, write them, double check for accuracy, and confirm they went where they were intended.

If your check gets lost in the mail, odds are you might never see it - or the funds it represented - ever again. You’re left to deal with the consequences, and will likely spend months cleaning up a mess that wasn’t your fault in the first place. Avoid this scenario by switching to grant payment software. 

Using an automation tool eliminates many “what ifs,” and makes it so much easier to stay in control of your payments. All your payment needs end up on a single, intuitive dashboard. Manage your accounts payable, keep track of funds going in and out, and stay updated on the status of each transaction. And, on the rare occasion someone makes a grant payment/distribution mistake, it’s easier to nip it in the bud much faster when you can see and track everything.

Security is another benefit that makes grant payment software superior to its traditional counterpart. Grant notification alerts keep you informed every step of the way. Furthermore, a quality payment management system will have the standard security protocols and encryption in place, as well as other layers of security to ensure banking data remains safe and private.

Time is of the essence as they say, and you get to save loads of it when you switch to an automated payment management system. From keeping documents in one centralized and searchable location to automating administrative tasks - everything related to your grant organization will feel simpler and less time-consuming.

Late and missed payments can harm the relationships you’ve worked hard to establish, could result in incurred fines/late fees for your grant recipients, and in rare cases may even lead to legal action. A payment management system for your grant organization ensures your grantees get the money they need when they were promised they would have it!

Learn more ways that grant payment software makes life easier here.

Related: Read our post Distribute Your Grant Money Safely and Easily using Send Grant.

• Grantee access and online applications – It’s important that grantees have their own portal so they can sign on and interact with your foundation. A portal where users can log on and apply for your grants can also make things more convenient.
• Reviewer access – Reviewers should be able to log onto their dashboards and see when and what tasks they still need to complete.
• Universal search tool – The ability to search across the database and retrieve records can save both time and energy.

Automation – Automation helps to streamline your grant workflow so you can be more involved in grant giving and less on paper-pushing.

• Reporting - Reporting breaks down complex data into more digestible formats.
• Audit trails – In the case that changes are made to a profile, request, or grant – it’s important that a revision history is kept available. Audit trails are automatically generated for grant payment systems.

Cross-platform compatibility – It’s important to find grant payment software that offers flexibility when unexpected situations come up. IPad, iPhone, and Android users should be able to access grant payment software whenever and wherever they are.

We covered four additional critical features to look for in a recent post on our blog. Click here to read it.