PALO ALTO, Calif., Oct. 17, 2016 /PRNewswire/ -- A survey by TechValidate Market Research of over 200 US-based finance and accounting practitioners and executives, commissioned by Tipalti (http://tipalti.com), revealed that today's accounts payable (AP) operations remain a mostly manual operation. A large majority of companies are still handling essential supplier payment processes and best practices by hand, leading to greater errors as businesses grow and expand globally.
Some key findings from the report include:
- Manual effort remains the primary method for getting accounts payable done. An overwhelming majority of respondents indicated standard AP processes were either completely manual, mostly manual, or 50%+ manual for the following processes:
- 60% for invoice collection
- 61% for payment approval routing
- 58% for remittance
- 61% for supplier communications
- 78% for payment issue resolution
- Accounts payable and supplier payment operations best practices are either completely manual, mostly manual, or 50%+ manual for the following:
- 75% for supplier onboarding
- 64% for tax form collection and validation
- 50% for tax withholding and reporting
- 66% for blacklist/AML compliance
- 66% for payment reconciliation
- 80% of companies that remit over 500 payments a month stated a payment error rate of 1% or higher. 44% had an error rate of over 3%. To put this in perspective, a 3% error rate on 500 payments a month is 15 errors, which can lead to 180 hours or over $24,000 spent annually on payment resolution.
- Time spent on the manual invoice-to-payment process is extensive. 27% of respondents spend over 15 hours a week. 20% spend from 10 to 15 hours per week. And 26% spend from 5 to 9 hours per week.
- For companies that send payments globally to more than 6% of their suppliers, 47% had an error rate of over 3%. They also spend more time (31% spend over 15 hours a week) and headcount (34% had 10 or more staff) to manage payments.
AP friction is limits the ongoing improvement opportunities for organizations. If the accounts payable function was more automated, many professionals would spend more effort on strategic initiatives. 65% say they would focus on optimizing business productivity across departments. 55% say they would work more on cash flow and business analysis.
The survey, commissioned by Tipalti, was conducted and certified by TechValidate in February 2016. Responses were gathered from accounting and finance professionals from a wide array of company sizes and positions at for-profit businesses in the United States. Questions were related to supplier payment processes, employment of financial control best practices, and the current effort associated with the AP operation. The survey also polled respondents on the hindrances to adopting AP automation and the post-adoption aspirational goals for the organization.
"Finance leaders need to help drive the strategic direction of their enterprises and use their finance talent to help their business make better decisions. Lacking adequate end-to-end accounts payable automation systems, CFOs are unable to advance critical finance initiatives that generate greater corporate value and strategic insight, such as improving productivity, improving business analytics, strengthening financial controls and accelerating financial close," says Chen Amit, Co-Founder and CEO of Tipalti. "The effort around doing AP right and scaling the business can't be answered by throwing headcount at the problem and instead should be addressed by applying greater automation throughout the entire supplier payment process."
The report summarizing the survey findings is available at http://info.tipalti.com/accounts_payable_trends_2016_WP_LP.html.
TechValidate is a trusted third-party research organization that directly interfaces with business and technology end users to collect and validate information about their deployments. More information is available at www.techvalidate.com.
Tipalti is the only supplier payment automation solution to streamline all phases of the payment management workflow in one holistic cloud platform. Tipalti makes it painless for finance departments to manage their entire AP and supplier payments operation. The solution addresses everything from payee onboarding and vetting, to tax and regulatory compliance, invoice processing, payments to suppliers anywhere in the world in a wide range of payment methods and currencies, supplier payment status communications, to closing the loop with payment reconciliation and reporting.
Innovative companies use Tipalti to eliminate up to 80% of their supplier payment workload, helping them scale their business efficiently with global growth, while strengthening financial and compliance controls and while enhancing the partner payment experience. Companies like GoDaddy, Eventbrite, Zumba, GoPro, Vimeo and hundreds of others trust Tipalti to elevate their global supplier payments operation.