STP Full Form: Straight-Through Processing

How does AR automation handle tedious manual processing tasks and cut time from hours to minutes? The answer is straight-through processing (STP full form).

STP full form is Straight-Through-Processing (STP) helps companies process financial transactions faster by streamlining the exchange of data between multiple points in a fully automated manner. In accounts receivable, Straight-Through-Processing (STP full form) solutions reduce errors and reduce the repetitive small tasks required to collect and reconcile payments.

B2B companies will benefit most from adopting an STP process, as they still rely heavily on paper-based processes and paper check payments. By using payment processing software that includes Straight-Through-Processing (STP full form in business), these businesses can reduce payment cycle times by up to 60% and reduce collection costs by up to 50%.

In other words, automation frees up AR teams to spend their time on high-value tasks instead of doing basic data entry. And doing more, faster. In this blog, we will cover the basics of STP, STP full form, and how companies are using STP to speed up their transactions, along with some tips to get you started.

What is STP Full Form?

STP full form is Straight-Through-Processing (STP) helps companies process financial transactions faster by streamlining the exchange of data between multiple points in a fully automated manner.

What is Straight-Through Processing?

Straight-through processing is a system that processes financial transactions electronically and replaces physical and paper-based activities with automation. Straight-Through-Processing (STP full form) systems are primarily used to speed up transfers and processing when receiving payments. The goal is to streamline payments so that once a transaction is initiated, all activity related to payment processing is first to be automated from start to finish.

This method requires no manual intervention and is significantly faster. When businesses adopt STP solutions, they experience fewer errors, faster turnaround times, and dramatically improved customer service. According to the Association for Financial Professionals, 47% of businesses now use Straight-Through-Processing (STP full form) to manage payments and 44% manage accounts receivable. Additionally, nearly half of respondents see STP as a greater benefit of electronic funds transfer than cost savings or customer relationships.

Which Businesses Commonly Use STP?

Medium and large businesses with demanding payment processes use STP. Almost any business looking to replace paper-based accounts receivable with a digital, remote-friendly system that is cheaper and easier to manage will also benefit from STP.

In some cases, companies may wish to develop their own solutions (marketplaces, CRMs, e-commerce platforms, software platforms). This includes payment gateways, prepaid cards, onboarding APIs, and more. However, the Straight-Through-Processing (STP full form) initiatives in-house can be costly to develop and maintain. Additionally, companies have more to worry about than processing technology. Adhering to payment regulations also drains your budget.

To ease compliance obligations and free up resources for mission-critical tasks, many businesses are turning to third-party providers of electronic payments and their STP systems.

Advantages of straight-through processing

Since the introduction of the STP system, high-volume businesses have found new ways to improve their business and accounting processes to track collections, save time and improve cash flow efficiency.

Traditionally, for payments received on paper or other manual means, AR has to go through a few steps before confirming it. These steps include sending confirmations over the phone, preparing transfers between departments, and the number of days it takes for the recipient’s bank to receive and process the money.

But with the help of the STP initiative, everything changed. Most quality Straight-Through-Processing (STP full form in Finance) solutions integrate directly with a company’s digital ERP to automatically track payment transfers. These solutions typically offer wire transfer payment gateways, eliminating the need for paper checks.

Best-in-class software has an average success rate of 67.2%, according to Ardent 2020 State of ePayables research. So the AR and AP departments just need to handle exceptions. This reduces your billing costs from over $12 to $2.56.

In more detail, here are some of the direct benefits of using STP:

  • Faster transaction processing instances and shorter charge processing cycles.
  • More manage over the timing of every transaction
  • Eliminate manual data entry and processing errors.
  • Improved data availability, reliability, and accuracy.
  • Reduce payment risk by minimizing human touchpoints.
  • Increased visibility into transactions and cash flow.
  • Increase AR staff efficiency and productivity.

Why Doesn’t Every Business Use STP?

There are several reasons why companies struggle with Straight-Through-Processing (STP full form) integration. It doesn’t matter if it’s an account receivable business or an entire enterprise.

1. Reluctance to keep payment information on file.

The most efficient way to achieve STP is to automatically process customer payments (autopay) when the invoice is due. This is accomplished by storing customer funds and payment information on a PCI-compliant platform that can process those transactions based on agreed payment terms. Unfortunately, many customers are still reluctant to leave their bank and credit card details with companies. It can be a potential stumbling block.

2. You are behind with paper checks.

While checks continue to decline in popularity for consumer payments, they still make up half of all B2B payments. This is because in many industries remittance documents are sent to customers and returned with payment for proper processing and shipping. This is how businesses essentially encourage their customers to pay by check.

Capable of scanning single and multiple checks and single and multiple remittance documents, Smart Lockbox offers a solution that streamlines the process. This becomes even more important in the event of a dispute or partial payment that causes headaches for the AR department. The digitization of the Lockbox system will increase transparency, reduce settlement risk, and enable AR departments to better track payments.

3. Limitation by ERP and system used.

Some businesses are stuck with outdated CRM, ERP, and payment processing systems that cannot support STP. The problem is exacerbated if these platforms are not PCI compliant. Businesses will be at greater risk when processing credit cards.

Legacy systems are likely to have limited booking capabilities and cannot connect to multiple systems to support multiple payment methods and channels (check, ACH, card, online and mobile payments). It’s not uncommon for businesses to use in-house or third-party payment tools for batch processing that can only process one batch and one payment at a time. This lengthy process takes 3-5 days. The latest Straight-Through-Processing (STP full form) solution requires only a fraction of this time.


Choosing a straight-through processing solution that works with your existing software is critical. All you need is an internet connection. Straight-Through-Processing (STP full form) software also allows businesses to easily automate manual payments and accounts receivable processes.

Your business can process payments from all major credit and debit cards, ACH, free debits, and virtual cards through a unified payment gateway. Also, it’s time to adopt a Straight-Through-Processing (STP full form) process to grow your business. Automate your AR processes, and get paid faster.

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