Straight-Through Processing

Straight-Through Processing Definition

Straight-through Processing (STP) is a method used to streamline invoice payment processing, optimizing for speed during the transaction. Straight-through processing allows information entered electronically to be transferred to all necessary parties without having to re-enter information at each step of the transaction settlement process. With this method, there is no need to manually enter the same information repeatedly throughout the entire sequence of events.

In accounts payable, straight-through processing refers to a common automation method used to streamline invoice processing. With straight-through processing, accounts payable departments can process every invoice received electronically and without having to manually enter supplier/vendor information repeatedly throughout each step of the process. By doing so, it speeds up the total time needed to settle invoices and release payment. Straight-through processing can also reduce or eliminate errors during process, which also increases efficiency and curbs delays.

Straight-through processing can translate into direct cost savings for businesses. Automation streamlines everything and reduces the number of people involved in settling a transaction. It also allows businesses to take advantage of discounts and incentives for early payment, such as a 2/10 Net 30 payment term. Straight-through processing reduces the number of days for invoice receipt to release of payment, meaning early payment to the vendor and a discounted total payment.

Accounts payable automation software can simplify every step of the invoice management process by:

  • Digitizing and integrating invoices from numerous sources into one existing database
  • Generating entry sheets and invoices for suppliers quickly
  • Automatic matching invoices to purchase orders and contracts
  • Giving full visibility over organization spend
  • Providing a platform for communication between suppliers/ vendors and your account payable department
  • Automatic archiving of accounts payable activities

Best Practices

Straight-through processing is a best practice that is being integrated into the payment process, and specifically accounts payable invoice management. Accounts payable automation — including e-invoicing or smart invoicing — utilize straight-through processing to increase efficiency, reduce errors, and save time and money through faster payments.

Some of the benefits that can be realized with straight-through processing in accounts payable automation are:

  • Scale your business and accounts payable without increasing headcount or payroll
  • Using employees’ time more effectively, instead of focusing on manual processes and matching invoices
  • Eliminating duplicate payments or mistakes in payments
  • Reduce invoice disputes from suppliers/vendors
  • Reduce cost of processing each invoice


AP Automation

Source: Accounts Payable Invoice Automation Made Easy (Paystream Advisors)

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