What You Should Know
Virtual Payables is an electronic supplier payment solution that Princeton University offers in conjunction with Bank of America. This payment method offers suppliers a fast, secure, and reliable payment option, significantly reducing the time it takes to receive payment for invoices.
Suppliers electing to be paid via Virtual Payables receive a unique credit card number that initially has no value. When the University approves an invoice for payment, the amount of the invoice is loaded onto the credit card number provided to the supplier. The supplier is notified via email or fax that the invoice funds are available and then simply “swipes” the credit card number to receive their payment. From the supplier’s perspective this works much like accepting a credit card in person, the key distinction being that they don’t have an actual credit card in hand, just a credit card number.
Among the key benefits for suppliers is the speed of payment. Princeton University’s standard payment terms are 45 and 30 days for check and EFT payments respectively. This means that the supplier will receive their payment 30-45 days after receipt and approval of an invoice in accounts payable. With the Virtual Payables program, the supplier will receive their payment typically within 2-3 days of receipt of the invoice. The short turnaround time offers suppliers quicker access to their monies, improved cash flow, and a reduction in paperwork.
Utilizing this payment also affords the University many benefits compared to other payment methods:
- Check - Paying by check is a highly inefficient process both for the University and the supplier. Checks are more expensive to produce, are often lost or uncashed, and must be reissued. In addition, it may take 50+ days from the date a supplier submits an invoice before a check has cleared and they have access to the funds.
- Electronic Funds Transfer - Virtual Payables eliminate the need for the University to maintain the supplier’s bank account information. With a heightened focus on protecting sensitive information, suppliers can rest assured there is one less place where they are asked to provide sensitive information.
Suppliers often ask what fees are incurred. Bank of America and Princeton University do not assess any fees in this program and each invoice is paid in full. However, because a Virtual Payable is a credit card transaction, any fees assessed by the supplier’s credit card processor will apply.
The Virtual Payables program is the University’s preferred payment method for suppliers providing goods and services to University. To learn more about Virtual Payables, including the many benefits of accepting payments by credit card, and answers to frequently asked question about Virtual Payables, click here.