Over the years, GIRO has become one of the most effective payment methods for businesses in Singapore. GIRO has eliminated the need for business owners to physically visit the bank to conduct fund transfers directly from their bank accounts. Moreover, the introduction of eGIRO has amplified the characteristics of traditional GIRO, providing the feature of instant fund transfers.
Even though GIRO and eGIRO reduce manual dependency on financial transactions, they necessitate higher monitoring. Below are some ways in which GIRO and eGIRO payments can be tracked:
- Reviewing physical bank statements.
- Setting up SMS or email notifications for GIRO deductions.
- Checking GIRO transaction history through online banking portals.
- Reviewing and verifying the status of scheduled GIRO deductions.
There are several benefits of tracking and monitoring GIRO or eGIRO payments.
1. Allows the detection of unauthorized, duplicate, or erroneous payments.
- Accounting and financial teams across businesses of all scales likely have to receive and make hundreds of transactions daily. The pace at which these transactions are made leaves more room for manual error. Without proper oversight, incorrect GIRO deductions could go unnoticed for long periods, leading to significant financial losses.
- However, by thoroughly monitoring GIRO activity through bank statements, payment notifications, and accounting system reconciliation, abnormalities can be caught right away before they translate into a financial loss.
- Furthermore, if inaccuracies in payments don’t get registered anywhere, it may ignite disputes between a business and its vendors. Disputes can significantly damage vendor or client relationships. Monitoring also allows businesses to catch and address issues before vendors even realize there is a problem. Smooth vendor relationships translate to better credit terms, reliable service, preferential rates, and continued loyalty.
2. Allows accurate cash flow forecasts.
- Periodically determining gains and losses is a healthy and essential practice for all businesses. Efficient budget planning relies on accurate cash flow forecasts. By closely monitoring GIRO payments, businesses can reliably track inflows and outflows.
- Scheduling recurring GIRO deductions for expenses like loan installments also promotes predictable cash flows. With clear visibility into payments, projections of future cash positions can be made with greater precision.
- Insights from monitoring historical GIRO payment patterns allow businesses to plan budgets, optimize spending, and allocate funds efficiently.
- Additionally, seasonal ebbs and flows in payments can be easily predicted and accounted for. Suppose a scheduled seasonal deduction is underway, such as seasonal purchases, gifts or bonuses to employees. In that case, businesses can easily build a financial cushion based on how they contemplate their financial health for the coming months. Rather than being caught off guard, companies can take a proactive approach to managing seasonal fluctuations.
- Any discrepancies between forecasts and actuals can also be rapidly detected through monitoring and used to re-forecast. Payments received using GIRO can help determine a company’s financial health and prompt changes in business strategies if projections are going downward.
3. Helps avoid late payment penalties.
- GIRO and eGIRO are almost considered synonymous with making recurring payments. Examples of recurring payments include loan repayments, seasonal expenses, or monthly service charges. Unless the terms and conditions state otherwise, these payments may have late payment penalties, which can be financially burdensome for businesses. While recurring payments can be easily scheduled with GIRO and eGIRO, financial teams cannot fully gauge the status of the payment if they aren’t tracking them.
- Monitoring provides visibility into upcoming due dates, allowing accounting teams to schedule deductions appropriately. For on-demand GIRO, monitoring enforcement helps guarantee that authorizations happen by deadlines. Oversight also quickly catches any missed payments, so the issue can be rectified before penalties are charged. Essentially, monitoring acts as a safeguard against accidental penalties.
- Additionally, monitoring historical late payments arising due to oversight provides insights to improve payment processes and prevent future late fees. The data derived from monitoring allows for the refinement of payment scheduling and authorization procedures.
Since a major feature of GIRO and eGIRO is automatic payment for scheduled expenses, it becomes vital for businesses to keep a keen eye on each GIRO transaction to ensure good financial health. Monitoring GIRO payments can have many benefits for businesses, amongst which unauthorized payment detection, efficient cash flow projection and timely payment verification are a few. Businesses should choose a monitoring method that best suits their convenience and needs.