Businesses that adopt electronic payment and process channels have been able to achieve a 16 percent decrease in the cost of accounts receivable processing and a 14 percent decrease in accounts payable costs year over year, according to a new study.
The study by the Aberdeen Group, funded by Sage North America, found that companies are employing electronic payments and process automation to streamline and accelerate their finance processes, reduce operating costs, and improve visibility, control and efficiency to help increase their profits.
Despite the reign of the paper check and manual-based processes in business-to-business transactions in the U.S. and many parts of the world, economic and efficiency gains from automating the financial supply chain from invoicing through payment settlement are key motivators for demand and supply to align, said Aberdeen senior analyst Nasreen Quibria, who wrote the report. While the adoption of electronic payment vehicles requires businesses to alter their payment behavior and restructure their financial processes, companies that can make the shift will gain competitive advantage.
According to Aberdeen, 50 percent of the companies surveyed integrate their electronic payment systems with their accounting, enterprise resource planning, or other financial systems. In addition, 39 percent of the companies said a lack of integration between their electronic payments and accounting systems acted as a barrier to increased electronic payments.
Last month, Sage introduced Sage Exchange, a new cloud-based Payment Card Industry-certified payments system to allow small and midsized businesses and organizations to accept all forms and methods of payment (see Sage Launches SaaS Integrated Payments).
Integrating electronic payment networks with back-office ERP systems is a challenge faced by all businesses, said Sage Payment Solutions president Greg Hammermaster. Sage Exchange overcomes this challenge by tightly integrating Sages accounting and ERP solutions, on both the AR and AP sides, with the most widely used electronic payment networks, including credit and debit cards, electronic check, ACH, and even private-label networks. While electronic payments data integration is the foundation, exponential value will be gained through a suite of connected services focused on streamlining the financial supply chain.
The Aberdeen survey identified two main pressures creating the need for improved payments processing: a corporate mandate to reduce overall payment transaction costs, such as staff and processing, and demand from stakeholders for improved operational efficiency, such as reduced reliance on paper documents.
Aberdeens payments study surveyed 160 companies worldwide and was co-underwritten by Sage Payment Solutions and Syncada, a joint venture between Visa and U.S. Bank.
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