A business Holy Grail is straight-through processing (STP)to help speed payments processing but a new study,conducted by Boston-based Aite Group in association with Longmont, Colo.- based Parascript, a recognition solutions provider, suggested thatthere are big stumbling blocks especially for the small businessesthat are the typical target market for credit unions.

For many financial institutions, the good news is that they havein place services that will help businesses speed up paymentsprocessing – but the bad news is that adoption, outside of the verybiggest company, remains anemic. The study indicated that some 67%of large corporations use lockbox services, compared to just 18% of smallerorganizations.

At many companies, receivables processing is a continuing issue.In a release, Parascript noted, “About one-third of midsizecompanies state that the timing of payments is their company's topchallenge with regard to receivables processing, and thatprocessing receivables requires a lot of manpower.”

With small companies, the hurdle is yet higher. Parascriptnoted: “Small businesses are more likely to make payments by papercheck than mid-market and large corporations, are more resistant toswitching to electronic payments/electronic remittancecommunication.”

The appeal of STP, per the report, is faster processing as wellas more use of automation which would allow for cuts in costs.

Nonetheless, the report pessimistically observed: “While[financial institutions] and third parties offer lockbox servicesto automate and streamline companies' receivables processing,remittance-details data capture and reporting, middle-marketcompanies use such services only minimally. The middle market,especially those companies approaching the upper end of thecategory (US $500 million), should be particularly interested inlockbox services.”

As for what financial institutions can do to stimulate use oftheir STP services by mid-market and smaller businesses, the reportspelled out the to-do's: “[Financial institutions] should ensurethat middle-market companies are fully aware of their receivablesprocessing solutions. [Financial institutions] need to over-explainthe benefits of this technology and price the offeringsattractively for this market.”