Takeaways 1 and 2
The Perceptions Study Deep Dive will be available this week and it’s chock full of compelling information about how customer payment is influenced by a supplier’s industry, revenue and invoice volume. This entry will focus on the first two takeaways.
Takeaway #1: Smaller companies prefer paper checks at a rate 2.5 times greater than larger companies.
Companies with less than $50 million in annual revenue, if given a choice, actually prefer receiving paper check payments from customers at a rate ranging from 36-38%. Companies with revenue greater than $50 million in annual revenue – including those with revenue well over $1 billion, prefer paper checks at a rate of 14-15%.
Many smaller companies participating in our study indicated ‘old school processes’ and ‘familiarity with paper checks’ as reasons for their preference for paper checks. With greater resources, in addition to a potentially larger customer base, those larger customers may have the ability to accept payment through a variety of methods, including ACH.
Takeaway #2: Companies using electronic methods when submitting invoices prefer ACH payment to paper check payment by a margin of 9 to 1.
The data shows those companies submitting invoices via paper methods (paper, email and fax) prefer ACH payments at a rate between 6% and 14%. Companies using some form of electronic invoicing method, such as third-party e-Invoicing, customer portal, EDI and ERP, prefer to be paid via ACH at a rate between 77% and 94%.
Comparatively, companies using paper methods to submit invoices prefer ACH payment (61% to 63%) to paper check payment (23% to 31%) by a margin of slightly more than 2 to 1.
See these and other findings in the 2015-16 Perceptions Deep Dive Study: Payment and Remittance publishing this week.