Recently we conducted a 5 question survey to learn more about the current status and challenges of your AP payment processes. Several questions closely mirrored questions from the Association for Financial Professionals (AFP) Electronic Payments Survey. We were looking to see if the organizations we serve were similar to those surveyed by the AFP. Close to 150 professionals answered the survey’s questions, providing an interesting snapshot of you and your peers.

Survey Results:

1) What is the biggest obstacle to setting up an electronic payment system to pay your vendors?

The top answer came as little surprise to the team at ACOM, it has been our experience that many organizations are poorly equipped to motivate vendors to transition to accepting electronic payment. It is interesting to note that in the AFP survey, this obstacle was less of a concern as organization size increases. In our results, we saw a similar pattern, as check volume increases, vendor resistance to electronic payments decreases. One explanation is that as organizations grow in size, they are perceived as less of a risk relative to the higher value of a larger account.

2) What do you consider the top benefit for sending e-payments?

Clearly cost savings and process efficiency are driving organizations to adopt these technologies, with fraud prevention and improved supplier relations composing the second tier of perceived benefits. The AFP survey ranked cost savings as the number one benefit, but had improved cash forecasting as the second ranking benefit, with straight-through processing third. In our survey improved cash forecasting was tied for last as a benefit. This anomaly does not appear to be directly tied to organization size, or payment volume, however larger organizations did place a reduced value on cost savings and straight-through processing in our results. The median organization size in terms of revenue in AFP’s survey was just over a billion dollars. Organizations in this survey are estimated to have a median size of 100-500 million in revenue, so the larger organizations in AFP’s survey may be skewing results relative to this study.

3) On average, how many AP payments do you process per month?

The biggest grouping here was in the 501-1499 range, with 43% of the responses belonging to it. This is also the payment volume where implementing electronic payment begins to really show significant ROI and becomes much more easily justified to upper management. This is supported by the fact that as an organizations' check volumes increased, they were much less likely to get resistance from management – in fact, number of respondents indicating that management approval was a problem dropped to zero (see table 1).

Table 1

Number of Mo. Payments	Percent with Mgmt. Approval Obstacles
<500	21%
501-1,499	50%
1,500-4,999	29%
>5000	0%

 

4) What percentage of your vendors do you currently pay via checks?

Responses to this question matched up to the AFP survey almost exactly, with the vast majority of respondents indicating a high percentage of respondents (77%) still being making over seventy-five percent of their payments via check.

5) How do you archive payment information and supporting AP documents?

With the supporting paperwork, we see greater movement to an electronic format than we see with the actual payments themselves. Twenty-five percent of respondents are well positioned to reap significant efficiency gains and cost reductions with electronic capture and document management systems. Almost 20% have moved away from paper storage, storing payment documentation as electronic image files, and eliminating file cabinets and off-site warehousing of paper documents. Over half have yet to move away from paper-based processes and filing systems. Clearly, given the payment volume of respondents, there is a promising opportunity for many of these organizations, if they choose to implement electronic payment and accounts payable process automation solutions.

Time to go electronic?

Steady progress is being made in the migration from checks to electronic payments among B2B organizations. These organizations are realizing significant, bottom-line benefits. These include cost savings, more efficient processing, reductions in fraud, and improved supplier relations. These benefits are so compelling that over 84% of organizations indicated they are likely to convert vendors to electronic payments in the next three years (AFP Electronic Payments Survey).

Progress has been slow however, as long-standing obstacles continue to hinder the movement to a more efficient payment process. Bolt-on solutions like ACOM’s EZPaySuite are well equipped to help organizations overcome these obstacles, easily integrating with existing systems, and minimizing the need for IT resources by eliminating custom programming requirements. Additionally, the problem of transitioning vendors to accept electronic payment can be alleviated with systems that automatically promote electronic ACH payment options to vendors, while supporting existing check-printing needs.

We hope you’ve found the results to this survey as interesting as we have, if you’d like to see more in-depth study of this topic we encourage you to review the complete results from AFP’s Electronic Payments Survey (PDF 33 pages).