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Usage of Paper Checks for B2B Payments is Declining

one half

What percentage of U.S. businesses would say no to cost savings, improved cash forecasting, tighter fraud controls and more efficient reconciliation? At face value, the question seems absurd, but in essence, half the B2B transactions made in the U.S. are potentially causing companies to miss out on some of these benefits, according to the 2013 Electronic Payments Survey from the Association for Financial Professionals[i].

The report stated that though businesses now have more options for electronic payments, such as ACH, wire payments and mobile payments, just fewer than half of survey respondents indicated that their organizations are very likely to convert the majority of their B2B payments to major suppliers from checks to electronic payments in the next three years. Today, only one in five organizations makes a majority of its payments through electronic means.

The report found that the typical organization makes 50 percent of its B2B payments by paper check. But this is down from 74 percent in 2007 and 57 percent in 2010.

Cost savings were the primary benefit of increased use of electronic payments, cited by 57 percent of those surveyed. Other benefits of electronic invoicing noted in the survey include improved cash forecasting (46 percent), tighter fraud controls (39 percent) and more efficient reconciliation (37 percent). The top barriers to the adoption of electronic payments revealed by the survey were difficulty convincing customers to pay electronically (82 percent) and difficulty convincing suppliers to accept electronic payments (74 percent).

Electronic invoicing and payments also help make it easier for companies to monitor the accounts payable process virtually through online and mobile platforms. These platforms can give AP professionals the flexibility to review, approve or make changes to invoices remotely, which can help increase efficiency in the reconciliation process.

 

 



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