Inaccurate data that finds its way into the global banking payment process creates "hidden costs" of hundreds of thousands of dollars for banks, corporations or large retail businesses.
These costly miscues are highlighted in a July report from BankersAccuity for companies and treasury professionals using the standard Systems, Applications and Products (SAP) payment process to accept and make payments to other banks or corporations.
"There is a need to more effectively reconcile payments being received and even more of a need to correctly set up payments being sent out," says Sarkis Akmakjian, senior product manager for payment solutions at BankersAccuity.
The company's white paper attempts to guide payments professionals through a global banking system that can see as many as 5,000 changes to critical bank information every day, the Skokie, Ill.-based payments and compliance software provider stated in a press release.
BankersAccuity generally targets its software at professionals in treasury operations, payment hubs or shared service centers of multi-national corporations using an SAP payment system.
Incorrect bank routing codes required for setting up payment transactions represent a major stumbling block in payments, Akmakjian says.
"If a corporation submits a payment instruction to its partner bank, using an inactive or invalid local bank code, that payment instruction would be rejected and returned to the corporation to repair," Akmakjian says.
It could take days, if not weeks in some cases, for a corporation and bank to resolve such a problem, he adds. In most cases, a delay in the delivery of goods or services can slow down corporate projects or result in a lost customer for the corporation, Akmakjian says.
In addition, companies rarely use one bank, meaning the payments professionals must manage multiple communications, protocols, proprietary standards and processes at the same time, the report said.
"Treasury and payment operations are challenged to keep pace of all of the changes that occur in how payment transactions are routed and settled," Akmakjian adds.
The widespread use of electronic payments has also created a challenge for payments processors in ensuring that the information to set up those payments is precise, Akmakjian says.