check writing - David Goehring

New Study Shows Accounts Payables are Slow and Prone to Risk

April 6, 2015         By: Kevin Xu

Tipalti and Gatepoint Research have released a report detailing how businesses are dissatisfied with their accounts payables process.

The report gathered feedback from respondents who were top-level decision makers from companies with annual revenues between $5 and $250 million.

Of the more than 100 respondents, 72 percent reported that their departments spend more than five hours per week managing cash flows.

Paying the supply chain is in turn an understandably slow process. Businesses universally used wire transfers, while 88 percent reported using paper checks, and 80 percent used ACH.

While making payments seems like an arduous process in itself (51 percent of respondents reported dissatisfaction with their payment flows), there’s also another major issue in being compliant to relevant laws.

A full 66 percent said that their companies were not, or they were unsure if their companies were adherent to AML, anti-terrorism, or anti-drug-trafficking requirements.

So payments are not only slow, but the fraud monitoring and prevention tools in place are either insufficient, or are at the worst, non-existent.

Chen Amit, CEO and co-founder of Tipalti, said “As we all saw with the recent $7.7 million fine of PayPal, all companies are required to have due diligence processes in place that ensure payments are not made out to suspected terrorists, money launderers, and drug traffickers that are in the OFAC, AML, Anti-Terror, and Anti-Narcotics databases. It turns out, many other companies may not be acting in compliance with those rules.

As for the issue of directing companies toward faster and automated payments, Amit said, “Quite honestly, the idea of using technology to automate payments is a change in mindset and behavior so that takes education. Looking at our own dramatic transaction growth over the past year, I think it’s fairly clear that once companies are made aware to the benefits of automating payments, they are open – and actually quite excited – to rid themselves of their previous painful, error-prone, risk-laden, and inefficient processes.”