|TIME REALLY IS MONEY: Timeliness of remittance details is top priority for businessess|
U.S. businesses process 15.5 billion remittances monthly with domestic and international trading partners. However, only 14% of remittances are sent simultaneously with payments (not including wholesale lockbox). That means businesses currently re-associate the remaining 13.3 billion remittances that are sent separately each month, according to a study commissioned by NACHA-The Electronic Payments Association.
The study concludes that timeliness of remittance information is the most important aspect of remittance delivery for businesses. Seventy-eight percent of businesses that receive remittances cite timeliness of remittance receipt detail as very to extremely important. In addition, 45% of businesses designate email as their most preferred remittance delivery channel because of speed and convenience benefits. Yet, despite these preferences, postal mail continues to be the most frequently used remittance delivery channel.
"The findings of this study clearly show that there are opportunities to increase the electronic exchange of B2B remittance details," says Nancy Atkinson, senior analyst with Aite Group and lead researcher of the Remittance Practices Study. "While it was surprising to see that businesses prefer email, timely receipt of remittance information is the most important consideration in channel preference for both senders and receivers, domestically as well as internationally, and email certainly supports that criteria."
The study also shows that businesses want to receive remittance information with the payment According to the study, 69% of businesses receiving remittances indicate that "remittance information with the payment" is very to extremely important. Thirty-five percent of businesses receiving remittances designate "the ability to automatically post remittance information (or straight-through processing)" as very to extremely important.
"Payments plus information is valued by businesses," says Janet Estep, NACHA president and CEO. "The ACH Network provides a safe, secure, and reliable avenue for businesses to pass both payments and related information. By leveraging the capabilities of the ACH Network, businesses can more efficiently manage the more than 13 billion remittances that are still being sent separately each month, significantly improving their payables and receivables processes."
The findings of the study were a result of telephone interviews with 240 U.S. companies and 280 international companies that conduct business with the U.S. Respondents included receivables and payables professionals at large, medium, and small companies, along with a number of bank and payment service providers. The results include further U.S. and international benchmark data on the remittance channel volumes by specific payment type, formats exchanged, decision drivers and opportunities.
[This article was posted on September 11, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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