For years, accounts payable has had a reputation for being slow, manual and inefficient. New research from Tipalti says — yup — the situation hasn’t improved much.
A report released by the B2B payments company this month, conducted by TechValidate Market Research, found that the majority of companies are still depending on manual processes in their accounts payable routines. Specifically, 60 percent of companies said they input data from invoices manually; 58 percent said they do the same with remittance notices, and 78 percent said they manually resolve payment issues.
In a statement commenting on the findings, Tipalti CEO and Cofounder Chen Amit said the data is a troubling reminder of how far accounts payable has to go.
“Finance leaders need to help drive the strategic direction of their enterprise and use their finance talent to help their business make better decisions,” the executive said. “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.”
Tipati’s research also found that 61 percent of businesses surveyed manually approve payment routing. Three-quarters said they manually onboard suppliers, and two-thirds said they depend on manual processes for AML and blacklist compliance information.
Despite the conclusions, the research found that, surprisingly, manual accounts payable processes work well for these businesses. The majority of the companies surveyed that remit at least 500 payments each month reported an error rate of about 1 percent. Nearly half said their error rate is only 3 percent.
Regardless, Amit added that manual processes can hold a business back from its growth plans.
“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,” he added.