The last phase of the AP process is the scheduling, processing and execution of an invoice payment. In the US, paper checks are still dominant as a payment format; however, this is shifting rapidly. The migration from paper checks to electronic payments (e.g., ACH, card, wire transfer, etc.) is a trend that is only going to accelerate over the next few years. Checks are costly, inefficient, prone to fraud, and offer very limited visibility into payment data and companies of all sizes are realizing this.
Ardent Partners believes that the tipping-point for electronic payments is at hand with most large enterprises already making a (growing) percentage of their payments electronically. Additionally, small and mid-sized businesses are increasingly leveraging various cloud-based services to send invoices and make payments. In many cases, it is easier for small businesses to start their AP transformation by introducing ePayments due to their quick implementations and the lack of heavy IT infrastructure.
Although checks, wire transfer and ACH payments are in place at a high percentage of companies already, it is ACH payments and card payments that have shown wide-spread growth over the last two years. Eighty-one percent of enterprises report an increase in ACH payments and 50% report a rise in commercial card payments. This is evidence of a major migration from paper checks to electronic payments.
In addition, Ardent’s research shows that suppliers are increasingly supportive of this shift. An overwhelming majority of AP professionals (91%) agree that their suppliers are more favorable to accepting ACH payments today than they were three years ago.
While Ardent Partners’ research shows a tremendous amount of interest in electronic payments, there are challenges that organizations still face when pursuing an ePayment initiative. The high check volumes we still see today means that there are still barriers that need to be overcome in order to drive mass adoption of ePayments. The top barrier to increasing ePayments is still on the supplier side as 53% of AP groups say that it is a difficult task to convince suppliers to accept ePayments.
The complete report – ePayables 2013: AP’s New Dawn can be found via the sponsors Basware, Bottomline Technologies, ADP, Hubwoo, US Bank and Ariba
