Payment Automation: The Value Of Optimizing Payments
Historically, accounts payable assessments and subsequent payment automation initiatives have not given adequate consideration to the type of payment method chosen for disbursements. This is evident given the following results from the 2016 AFP Electronics Payments Survey: an overwhelming majority of organizations (94 percent) continue to use checks to pay their major business suppliers. There are meaningful differences in the costs and risk exposures associated with a given payment method, whether a payment is made by a check or some form of electronic payment. This is puzzling given that on an annual basis, companies waste $550 billion on inefficiencies associated with payments.
Despite great advances in the availability of data and the functionality of cost-effective payment automation solutions, most companies still face issues when making payments. The following issues, which are eliminated or mitigated through payment automation, include:
- Payment methods chosen are not cost-effective
- Different processes for checks, ACH payments, wire transfers, and credit cards
- Payment controls are difficult to monitor and enforce
- Payment risk exposures that are unchecked or unknown
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