B2B Payment Practices to Drop in 2021
B2B companies are notorious for being slow adopters of technology when compared to their B2C counterparts. But the massive paradigm shift in how payments are made and received because of the pandemic has forced payment automation into the forefront for all businesses.
As WorldPay’s Maria Prados observed, “B2B historically has been pretty behind, especially around payments.” But because the industry was less digitized and a lot more reliant on manual processes going into 2020, many B2B merchants were left with no choice but to make changes – and make them quickly. Digital transformation initiatives had three- to five-year timelines, but now are executed in six months or less.
Payment Technology Provides the Tools Needed to Succeed
To survive and succeed, B2B organizations must transform their accounts payable process and cost structure. Now is the time to strategically rethink how to operate and make a commitment to lasting gains. To do this effectively, businesses need to find ways to deliver more with less, apply smart financial controls, maintain team productivity, and address operational risks. Smart payment technology helps make this happen in the short term while planning for long-term success.
AR/AP Processes That Should be Left Behind in 2021
1. Manual Operating Processes
Trusting people over technology feels safer, but it can ultimately hold a business back from operating as efficiently as it could. Manual processes are not scalable, nor are they exact, leaving a larger margin for costly errors.
On the other hand, with payment automation, multiple business processes related to accounts payable management can run at the same time.
2. Relying on Paper Checks
When antiquated technology is used, the further behind a business will fall in operational efficiency. Payment methods like paper checks are not only inefficient — they also hinder the supplier and partner experience. For instance, the processing time may delay a B2B payment from clearing by up to two weeks, which, in turn, makes it hard for a finance department to predict fund transfer timing and related data.
Modern technology solutions eliminate the guesswork from B2B payment processing times, smoothing out relationships with vendors, and cleaning up the data you share with your leadership team.
3. Lack of Financial and Compliance Controls
Using outdated manual processes leaves dangerous gaps in accounts payable management and financial controls. Along with these threats, manual B2B payment processes overwhelm finance teams, leading to disengagement, mistakes, and other problems.
Modern technological solutions can alleviate all of that. These solutions act as safeguards against fraud loss and strengthen internal processes by leveraging enterprise-level financial controls.
4. Failing to Look at a Business from End-to-End
As a business grows and scales, it becomes more complex as you add subsidiaries, divisions, business units, and brands. Without scalable processes in place to ensure consistency and standardization across multiple entities, it will make it impossible to standardize accounting procedures across the business.
B2B technology solutions provide the vital methods needed to protect accounts payable operations by providing end-to-end capabilities for multi-entity companies in a single platform. This creates a solid framework in helping finance departments manage growth and scale compliantly.
How do B2B Merchants Take the First Step?
Start by leaning into digital transformation and empowering the finance team with real-time data. Once an automated accounts payable solution is identified and added to business procedures, the rest will start to fall into place.
Learn More About i3 Merchant Solutions’s B2B Payment Automation:
Contact us online or call 1-877-875-6114 x3.
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