How straight-through processing works

Straight-through processing helps automate your payments, making your payment cycle significantly shorter while also avoiding messy manual errors.

Technology has continued to shape the way we do trade. The internet ushered in the age of e-commerce, where companies like Amazon have grown astronomically. Along with how we do business, our payment systems and accounting processes have changed dramatically. Financial technology advancements have made electronic payment processing a faster, more accessible way to make payments, especially in online marketplaces. Manual intervention is seen as slow and meticulous, and the use of automation technology is slowly phasing out the days of faxing confirmation to a bank for traditional payments. More advanced methodologies that use automation to process payments continue to gain popularity, such as straight-through processing.

What is straight-through processing (STP)?

Straight-through processing is transactions that are entirely automated and need no human intervention to complete. Due to being very hands-off, these transfers save money for both companies and the financial service provider. STP also has fewer errors due to a lack of manual entry, leading to fewer disputes and a more reliable system overall.

Before STP, traditional payments required the settlement details of your payment to be confirmed by a supervisor at the financial service provider. The first introduction of straight-through processing started taking shape in the 70s when SWIFT networking was founded and ACH was developing. STP payments were then used in the United States first as a more efficient direct deposit method. Today, payroll direct deposit is a widespread form of STP transfer used by most companies unless they have older accounting systems or CRM software.

How STP works

Straight-through processing encompasses a wide variety of automated transaction solutions from the beginning to the end of the payment, making them less dependent on human intervention. Suppliers and buyers can make and receive payments through many different STP avenues, such as credit card companies, for example. Using these fully electronic methods means quicker processing cycles and lower costs in the long run for companies. While STP is a large umbrella, it facilitates a few things consistently:

Electronic processing of transactions

Manual, human workflows are unnecessary within a usual STP transaction. Rather than having actual people confirm the data between parties, this is all done digitally and automatically, saving significant time for the institutions and speeding up the transaction.

Concurrent exchange of information

The needed data is transferred automatically between institutions to safely confirm the transaction's legitimacy and, in most cases, doesn't need any intervention. If there are any red flags, they are immediately raised in real-time.

Real-time processing

Without the manual processing needed in the traditional payment process, STP can be processed in real-time. The automation of many of the checks involved means that the average transaction information can be sent and confirmed by a bank within a rapid period of time.

Which businesses use STP?

The most common areas to see straight-through processing include equities trading and payments. While large companies are most likely to use STP transfers, any company looking to save time and money can consider implementing software that facilitates these transactions.

Credit card providers sometimes facilitate STP payment transfers, such as Mastercard and Visa. Companies such as Amazon have streamlined straight-through processing, allowing customers to quickly check out with an extremely minimal amount of clicks. Cryptocurrencies are an example of the ever-changing STP landscape that even shed the need for a holding company due to their technology-driven network architectures.

Why you should use straight-through processing

There are many benefits to using STP, including eliminating common manual errors, saving money, and facilitating faster transactions. Here are just a few reasons to consider implementing straight-through processing technology:

Faster transaction processing times and shorter payment cycles

Speed can make all the difference in paying out vendors, receiving efficient payments from clients, and making immediate investments. Whether growing your relationships or increasing your profitability, faster financial transactions can help.

Eliminate manual data entry and processing errors

Data entry errors are messy and costly. Automation helps avoid expensive mistakes and can help save time for accounting teams to focus on more essential tasks.

Better data availability, reliability, and accuracy

With automation, some accounting programs allow for STP payments that are tracked accurately and in real-time for a consistently updated audit trail. Knowing that your payments are handled through a constantly updated payment platform means that you can rely on your data for business analytics and accurate audit data.

Reduced risk through minimal human touch-points

With less manual error, you can protect yourself from very costly accidental entries. Automation also is more tamper-proof, providing some internal fraud prevention.

More control over the timing of each transaction

When it comes to investing or transactions, timing can mean everything. Paying invoices before a specific time often means discounts for your company, while making that investment at the perfect time is paramount to big profits.

Greater visibility of transactions and cash flow

With up-to-date data and automatic fraud detection, STP automation can help not only keep your cash flow accurate in real-time but can help your compliance.

Greater accounting staff efficiency and productivity

It isn't hard for accounting teams to be overwhelmed by immense amounts of manual entry. By alleviating some of that work, staff can focus on more crucial tasks and become significantly more efficient even as your company scales.

Improve AP with Routable

Routable is an accounting automation tool that allows your team to work more efficiently through automated accounts payable and receivable. Through powerful AP automation tools that will enable frictionless payment processing, you can quickly pay your invoices while sending live notifications throughout the process. Through detailed tracking and precise documentation, Routable will empower your team and help keep audit trails that keep your company prepared for anything.

AP automation

Routable makes it easy for companies to start automating their manual payment workflows. Through customizable workflows and integration with your team's established tools, Routable wants to make your current process more efficient, not impede your team through a rigid structure. AP automation helps your team become more efficient by eliminating many manual entry points while keeping your team up-to-date on what they need to know.

API for mass payouts

Paying your many vendors and suppliers can be time-consuming. That is why Routable has CSV uploading capabilities and powerful API features that allow you to process hundreds of payments simultaneously while also detecting duplicate payments. Our software will help your team scale to whatever your company needs, regardless of payment volume.

Accounting software integrations

The Routable platform integrates directly with your team's current accounting tools and software so that your team can hit the ground running. Preventing a time-consuming onboarding process helps your team utilize our automation quicker without confusion or extensive training processes.


Straight-through processing systems are automated, speeding up transactions by preventing the need for human intervention. Utilizing straight-through processing systems does a lot more than make payments more manageable. STP can save money for a company, prevent manual error mistakes, catch fraud, improve compliance, and create happier vendor relationships. Picking a provider that can mesh well with your current workflow is essential as you transition over. If you want to learn more about how Routable can help facilitate straight-through processing for your company, schedule a demo with us.


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