The Aite Group recently conducted a survey that analyzed remittance practices, benchmarks and perspectives of US and International corporations.  The findings confirmed some commonly held views but also provided some surprising insights into practitioner’s preferences.

The study was based on 240 U.S.-based companies, 280 companies based outside of the U.S., and a total of 25 financial institutions and other industry participants (e.g., third-party processors, vendors, and industry utilities)

Some of the less surprising findings were:

• Checks still rule. 70% of B2B payments are still made via check.
• The lack of structured data and application of standards makes custom coding the norm to improve straight-thru-processing (STP) rates.
• Midsize and small businesses lack the IT staff to develop automated solutions.
• Society still worries about exposing bank account numbers to trading partners.
• Small businesses comprise the highest percentage of business customers and suppliers for U.S. –based companies. 34% of receivables respondents are less than US $10 million in revenue and 40% of payables respondents are less than that same threshold.

Some of the more surprising findings were:

• Almost 60% of payers at U.S.-based companies allow other companies to initiate direct debits to their companies’ accounts, while only 25% of companies based outside of the US allow direct debits to their accounts.
• Generally it is the payer who determines how remittance information is exchanged with suppliers.  Suppliers are not in a position of strength when it comes to dictating formats.
• For both Receivables and Payables respondents, both within and outside of the U.S., having the remittance information when the payment is received is the most important consideration, more so than receiving the information in a structured format or being able to auto-post the information without operation intervention.
• Of U.S. remittance volumes by channel, only 10% are sent with the payment in an industry-standard format. 56% of remittances must be re-keyed into AR systems! 
• The most preferred way of receiving remittance information, regardless of business size, is… email!  Email is considered easy and convenient, quick and timely and provides adequate levels of detail.
• The most preferred way of sending remittance information is mail (for small and medium businesses (< $10M and $10M-$500M in revenues respectively) and email for large businesses (> $500M in revenues). 

The shift from paper to electronic delivery of both payments and associated remittance has been inexorable but slow. The results of the survey show clearly that the most popular and prevalent form of remittance delivery has the following characteristics:  it’s ubiquitous, it’s familiar, it’s easy to use, it’s reliable, it’s based on a worldwide standard, and it is perceived as free.  As the financial services industry, software vendors and standards groups continue to support efforts to enable straight through processing, it will be important to keep these characteristics in mind.   

 How do these findings align with your experience?  I’d love to hear from you.