Consumers happily use technology to buy and pay for everything from shoes and electronics to coffee and groceries. Businesses, however, have been slower to follow.
A surprising 51 percent of B2B payments are still made by paper checks, and more than 60 percent of payments require manual intervention, according to the 2016 AFP Electronic Payment Survey. That means many organizations have multiple departments and employees to send, receive, organize and store checks, invoices and other paper documents. In total, organizations spend $180 billion annually on paper-based B2B transactions, according to PayStream. They also have higher exposure to fraud.
New technologies—including big data and cloud-based platforms—can give suppliers and buyers more insight and disrupt paper-based payments.
Seventy percent of AFP survey respondents reported that their organizations are likely to shift most payments to electronic in the next three years. Already, businesses are using fewer checks as they take advantage of electronic channels to save money and time while improving the quality and accuracy of their information.
Companies can tap into a number of technologies, including:
Cloud computing can host their accounting systems, both decreasing costs from on-site accounting system management and facilitating the integration of digital payment capabilities.
Application program interfaces (APIs) move them away from custom file integrations to open standards, allowing them to build once and deploy many.
Electronic invoices and enhanced digital workflow capabilities allow them to effectively and easily track, audit and manage both payables and receivables.
These advancements are changing the B2B landscape and creating opportunities for companies to reap benefits of a more efficient payments platform:
It’s easy to extol all the benefits of electronic B2B payments, but then comes implementation. Some organizations have tried standard packages while others have developed their own solutions.
Either way, businesses can encounter barriers, including the top five the AFP survey found:
As technology continues to disrupt the payments space, businesses now have the option to use simple and efficient B2B payments platforms that will help them streamline and automate what once was a complicated, manual and expensive process. The benefits of adopting an end-to-end payments solution is substantial and will help businesses collaborate with vendors and customers, while saving time and money.
This article was originally published in Payments Source.
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