What is straight-through processing?

With growing volumes of digital payments, where each method requires its own process or system, many businesses are struggling to maintain accounts receivable efficiency. By understanding straight-through processing, these companies can evolve their current processes to automate and save both valuable time and money.

What does straight-through processing mean?

In accounts receivable, straight-through processing (STP) is a rate that measures the degree of automation in the receivables process. The following examples can affect straight-through processing: a reduction in invoices that require manual intervention, fragmented data, number of employees involved in payment processing and the number of steps required.

How do you measure straight-through processing?

Straight-through processing is calculated by looking at the amount of manual vs. automated steps within the accounts receivable process. For example, a business with a 100% straight-through processing rate relies solely on an automated process without any manual intervention.

Why is straight-through processing important?

Companies and financial institutions alike use straight-through processing to gauge their receivables performance. The crucial reason to understand this rate is to follow up on the percent that is not straight through. By examining their STP rates, businesses can identify where their payment processing can be improved with receivables automation to eliminate manual processes, increase cash application and improve the customer experience.

How does receivables automation affect straight-through processing?

Deluxe Receivables improves STP processing by reducing the number of manual steps needed during the payment process. In fact, up to 95% of Deluxe Receivables customers show unrivaled, straight-through processing rates. It also speeds cash application and provides more visibility into a business’s receivables processing.