New Study Sheds Light On The Importance Of Cross-Border Payments to Accounts Payable Organizations
San Mateo, CA, April 11, 2017 – The majority of accounts payable organizations now conduct cross-border payments, as shown in a new study carried out by research and analyst firm PayStream Advisors and sponsored by Tipalti, one of the leading global supplier payments automation solutions.
The study, which focused on current market trends and common challenges companies face in global payments management, highlighted the challenges businesses are having managing their cross-border supplier payment operations. The study is based on a market survey of professionals from over 400 organizations across a variety of industries and market segments.
Some of key findings from the report include:
- Over half of organizations surveyed make over 2 percent of their payments to suppliers in other countries
- A major reliance on wire transfers (61%) for international payments, which are expensive and can be difficult to execute. Global ACH was the second most popular payment method at 20%.
- 63% of organizations do not make payments to global suppliers as part of their standard payment run (requiring a special process, separate payment method, separate bank, or lacking a defined process)
- Higher volumes of cross-border payments are correlated with higher rates of payment errors
- Inconsistent global payment processes or using separate banking partners are correlated with higher rates of payment errors.
“Managing global supplier payments is a time-consuming, risk-prone, and arduous task, ” says Anna Barnett, Research Associate of PayStream Advisors, and lead analyst on this report. “CFOs can streamline the global payments process by instituting modern accounts payable systems, like a global ePayments platform. These systems provide corporations with the necessary toolkit to manage their complex cross-border payment operations.”
Paying Global Suppliers Generates More Risk
According to the study, the majority of error rates stem from inconsistent processes for handling global payments, with a disparity of almost 20% between both ends of the spectrum. Also factoring into the error rates is payment volume, with corporations that handle a larger volume of cross-border payments having significantly higher error rates. Even when organizations separate domestic and cross-border payment runs, they still experience pains related to manual processing.
“Working with global suppliers is a must-do for companies who want to reach peak competitiveness,” says Chen Amit, CEO and Co-Founder of Tipalti. “However, these companies have to contend with high payment error rates, complex tax compliance and regulatory requirements, time-consuming accounts payable operations, and fraud and financial reporting risks. It’s imperative that as companies continue to increase their global supplier bases, they put into place the right systems and processes that will scale financial operations with that future cross-border payments growth.”
Click here for the complete report.
About Paystream Advisors
PayStream Advisors is a research and advisory firm focused on business process automation in sourcing, supply chain management, procurement, accounts payable, payments, and expense management. PayStream’s team of experts provide targeted research and consulting services to address the changing needs of finance and procurement professionals. In short, PayStream is dedicated to maximizing returns and minimizing risks associated with technology investment. PayStream’s research reports, white papers, webinars, and tools are available free of charge at www.paystreamadvisors.com. PayStream Advisors is a division of Levvel, an IT consulting firm specializing in technology strategy, design, architecture, and DevOPs.