Automating and Centralizing B2B Payments for the Growing Business

With close to $1.6tn changing hands in 2023 in B2B payments, managing invoices, payments and fund transfers are clearly at the core of any successful organization.

Yet, in B2B payments, the experience of receiving or making payments is often sub-optimal. CFOs and their Finance Department personnel still have to manually chase payments, enter transaction details by hand into multiple systems, instigate surcharge and split policies on a case-by-case basis, and take on a dozen more low-level tasks each working day. That’s a costly overhead for critical processes that hits any company hard, especially given that qualified staff are (rightly) well-paid professionals who often have to sideline themselves to pore over minutiae.

Part of the problem of today’s payment processes stems from the fact that many organizations have adopted several different technologies and internal processes over time aimed at making workflows more efficient. But as the business grows and changes, embedded workflows and systems have gradually become less suitable both in terms of scale, and the evolution of the expectations of what we now call user experience.

The experience issue

One of the side effects of the digitization that’s taken place over the last three decades is the ease and simplicity that we’ve all come to expect from everyday financial transactions. Money transfers from personal accounts and cards to retailers, instant banking, and access to the broadest possible range of financial services – all from the simple tap of a screen or mouse click.

Source: Unsplash

In business settings, users bring their assumptions from everyday financial transactions they undertake away from work and find that the B2B processes encountered are second-best. Instead of a simple, one-stop method of payment, payers and payees have to navigate several platforms and interfaces to achieve what should be a relatively simple task.

Paying the price

The cost overheads of inefficiencies result in high DSO figures (days sales outstanding), wasted time spent on re-entering details on multiple systems, and overpayment of processing fees on qualified B2B/B2G transactions, for example.

Many organizations find themselves at the wrong end of unfavorable surcharges and levies due to the perceived cost of change. But as the business scales, costs of managing processes like large split invoices, recurring payments and reconciliation can easily grow. It’s in this environment that there’s a greater risk of fraud and regulatory mis-step as businesses prioritize growth over consideration of the small print.

Choosing what fits

Large ERP vendors and many automated payment system vendors offer an approach that, if not a complete ‘burn down and start again’ solution, will require a significant systems overhaul to implement. But it’s not necessary in most cases to take such a drastic course of action.

Choosing not to take any action at all isn’t an option in any competitive landscape. Even in 2020, around 60% of respondents in an NCR poll chose digital payments as the most crucial development in the B2B Payments Market.

By focusing on where costs are being accrued and ensuring the following aspects of a B2B payment platform are observed, organizations can do better. To achieve better efficiency in the finance department, automate many manual processes, reduce payment costs, and offer users consumer-grade experiences, consider the following:

– Integration: existing systems in the Finance Department and across the wider enterprise represent significant investment. Plug-and-play with other technologies means that core systems can be updated with real-time financial data without the need for double- or triple-entry of information.

– Right-sizing: larger transactions come with inherent complexity that makes manual errors potentially disastrous. Small business accounting and payment systems can be made to emulate the capabilities of platforms specifically designed for mid to large enterprises but are not designed to scale. Choosing a right-sized solution allows for future growth as well as making for savings and efficiency today.

– Error correction: manual processes lead to increased numbers of mistakes (at least some of which can be put down to staff boredom!). Identifying individuals’ pain points at the front line in finance teams will help prioritize areas where automation will be most effective.

– Full disclosure:  a single source of payments and oversight of transactions all through the payment process means there is no need for cross-referencing competing records on multiple platforms. The same single source of information can also provide accurate data when collating financial information for reports and planning.

– Seek specialists: a platform like PayTrace focuses uniquely on B2B payment automation and the specific challenges faced by mid- to large-sized organizations. Its experience and capabilities are dedicated to helping companies reduce payment processing costs and eliminating the manual processes that consume valuable resources.

Conclusion

In technology, 20 years is a lifetime, but it’s how long PayTrace has been specializing in B2B payments. It currently processes around $48 billion in payments annually and is the de facto choice for handling high complexity payment processes for thousands of organizations. In a tough economy where every dollar matters, driving efficiency in this core business function is critical.

To find out more about how PayTrace can work magic on your payment processing, fill out this form to start the conversation