Businesses of all sizes are increasing their use of electronic forms of payment to help improve their cash flow, according to a report from Aberdeen Group Inc.
"Companies are taking more proactive approaches to integrating electronic payments with their financial systems," said Nasreen Quibria, the Aberdeen senior analyst who did the research. "Companies are focused on cash flow and how they can optimize the cash they have."
Aberdeen, a Boston unit of Harte Hanks Inc., in May surveyed more than 160 companies worldwide. Sage Payment Solutions, a McLean, Va., payment processor, and Syncada, a Visa Inc.-owned business-to-business payment company, sponsored the report, which was released this month.
Not surprisingly, companies' use of checks is generally on the decline as more businesses adopt electronic alternatives, the survey said. Though 11% of respondents said they had increased their use of paper checks during the preceding 12 months, 57% said their check use shrank, and 59% increased their use of automated clearing house services.
Larger companies — those with more than $1 billion in revenue — were more likely to use ACH services to pay their suppliers than were smaller organizations, Aberdeen found. One impediment to smaller businesses' use of ACH services is the cost of integrating these services into a company's accounting system.
Commercial cards also gained favor among respondents. Forty-five percent had expanded their use of such cards during the preceding 12 months, and 43% increased their use of wire transfers to make or receive payments.
Corporate mandates to reduce overall payment-transaction costs are a primary driver of the rising use of electronic payment methods, Quibria said.