Improving and automating the supplier payment process remain top priorities for finance and accounts payable professionals in the year ahead, according to recent research.
Tipalti, a provider of automatic supply payment solutions, released the results of its survey aimed at identifying the top supplier payment trends of 2016. It showed 44% of respondents identified streamlining and automating supplier payments as a top business goal for the next 12–18 months. A quarter of respondents said improving the payment experience for suppliers and payees was a main goal and 15% want to increase the timeliness of payments.
Manual Processes Persist
Organizations are also spending a large number of man hours onboarding new suppliers each month and onboarding them largely through manual data entry, according to the survey. Forty-three percent of accounts payable and finance professionals surveyed said they onboard new suppliers through email communications with the payables team. Slightly less, 36%, onboard new payees directly through their payable team either in person or on the phone. Just 11% use an online form to onboard new suppliers and 10% use a self-service web portal, according to the Tipalti survey.
The majority of organizations spend more than an hour each week onboarding new suppliers, as well. Nearly 40% of respondents said they spend one to three hours every week onboarding new suppliers. Twenty-two percent spend four or more hours each week on this process.
The more suppliers an organization needs to onboard, the more time they spend on the process, too. Among organizations that onboard more than 50 suppliers each month, 67% said they spend more than four hours each week with new payee onboarding. This includes 47% who spend an excess of six hours every week on this process. Nearly half of respondents also said they spend more than six hours remitting payments to suppliers every week.
Various Payment Methods Slow Down Process
Paper checks continue to be a payment method of choice, too, which Tipalti said could add time to the payment process. Using a variety of different payment methods to pay suppliers can also increase the time it takes to remit payments, the report said. Eighty-six percent of organizations use paper checks and 83% use wire transfers. Additionally, ACH payments proved to be popular, with 82% of survey respondents saying their organization uses this payment method. Some organizations, 19%, even use PayPal or prepaid debit cards/e-wallets (16%).
According to Tipalti, organizations looking to truly improve supplier payments will either need to hire more resources or look to technology that can automate the process.
“Finance leaders of both small and large companies need to proactively determine the best approach to handle their increasing volume and complexity of global supplier payments,” said Chen Amit, CEO and co-founder of Tipalti. “Consider how the costs related to managing supplier payment operations distract from your ability to focus on more strategic and growth-oriented opportunities.”