When it was first introduced in the mid-1970s, electronic funds transfer was ballyhood as the wave of the future, the first step toward a cashless society. And now, 10 years later, with the proliferation of personal computers, more and more banks are encouraging their customers to pay electronically.

Small and medium-size companies aren't buying it. Chief among their complaints about electronic fund transfer is that it contradicts the key tenet of cash management: Use float time to its maximum.

Sager Electric Supply Co., of Hingham, Mass., is typical of businesses that are turning thumbs-down to payment by computer. "We write checks for our bills one or two days before they are due," explains Robert J. Anton, chief financial officer of the $30-million company. "Then we have two days until the check clears the bank. With electronic transfer, we'd lose those two days of float." None of Sager's own vendors now offers discounts for payment by computer. "Our suppliers," says Anton, "would have to build it into the price structure before we would consider it."

Electronic transfer has another drawback: It denies businesses the flexibility to decide when or even if to settle accounts. "You tell the bank when to pay a bill, and it's paid each month on that date," explains William B. Curlee, a partner in Arthur Andersen & Co.'s Detroit office. "You lose the option of putting off a payment."

Experts agree that electronic transfer makes sense for business in only one area -- the collection of accounts. President Richard Staudt receives money from members of Wedgewood, his private athletic club in Berlin, Vt., at the same time each month. For about half of his members, the money is moved electronically from their bank accounts to Wedgewood's in a matter of seconds. Members simply authorize their banks to make the deposits. Then, on a specific date each month, the money is automatically transferred.

The club doesn't have to send invoices, and it can depend on a steady flow of cash. "It's worked out well," says Staudt. "Trying to collect dues across the desk the first of every month would be a horrendous operation."