Finance and Accounting Professional Survey Identifies Waste and Risk with Today’s Accounts Payable Operation

A survey carried out by TechValidate Market Research of over 200 US-based finance and accounting practitioners and executives, commissioned by Tipalti, revealed to some interesting information regarding today’s accounts payable operation.

It revealed that the status quo of operations remain a mostly manual operation. A large majority of companies are still handling essential supplier payment processes and best practices by hand, leading to greater errors as businesses grow and expand globally.

The report included a plethora of findings, some staggering in numbers. Some of the key findings included:

• Manual effort remains the primary method for getting accounts payable done. An overwhelming majority of respondents indicated standard AP processes were either completely manual, mostly manual, or 50%+ manual for the following processes:

• Accounts payable and supplier payment operations best practices are either completely manual, mostly manual, or 50%+ manual for the following:

• 80% of companies that remit over 500 payments a month stated a payment error rate of 1% or higher. 44% had an error rate of over 3%. To put this in perspective, a 3% error rate on 500 payments a month is 15 errors, which can lead to 180 hours or over $24,000 spent annually on payment resolution.
• Time spent on the manual invoice-to-payment process is extensive. 27% of respondents spend over 15 hours a week. 20% spend from 10 to 15 hours per week. And 26% spend from 5 to 9 hours per week.
• For companies that send payments globally to more than 6% of their suppliers, 47% had an error rate of over 3%. They also spend more time (31% spend over 15 hours a week) and headcount (34% had 10 or more staff) to manage payments.

The survey was commissioned by Tipalti, and was conducted and certified by Tech/Validate back in February of this year.

The responses were collected by accounting and finance professionals from an array of company sizes and positions at for-profit businesses in the U.S.

“Finance leaders need to help drive the strategic direction of their enterprises and use their finance talent to help their business make better decisions. 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,” says Chen Amit, Co-Founder and CEO of Tipalti. “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.”