In this most unusual year, we’ve seen many things change, including the way businesses pay vendors. With staff often operating remotely, there’s been a noticeable shift away from paper checks in favor of electronic payments. Now, a new survey finds a big push is on to convert the majority of B2B payments to electronic.
The Association for Financial Professionals conducted the survey during its recent AFP 2020 conference, held virtually. More than three-quarters of responses came from corporate practitioners who manage treasury functions.
“The results suggest that organizations have converted or are likely to convert the majority of their B2B transactions made to suppliers from checks to electronic payments,” the survey found. Nearly a third reported that the majority of the B2B payments they make are already electronic, while 36% said conversion is very likely, and 22% labeled it a priority.
There’s a lot to like about electronic B2B payments. According to the survey, respondents “view the primary benefits of sending electronic payments to be straight-through processing to A/P or A/R, and general ledger, and cost savings, while half of survey respondents reported that speed of settlement is the primary benefit of receiving payments through electronic payment methods.”
While the move away from paper checks started before COVID-19, the changes that have occurred since the lockdowns began last March only hastened the process.
“As treasury teams have had to transition during the pandemic with many working remotely, electronic payment methods were more convenient and allowed for payments to be made and received with minimal disruptions,” AFP said. It is an assessment shared by Nacha.
“Nacha has been seeing for many years a robust increase in B2B payments made using ACH, alongside a steady decline in commercial check writing,” said Michael Herd, Nacha Senior Vice President, ACH Network Administration. “Those trends are accelerating in 2020.”