In the world of B2B payments, there exists a struggle between form and function. Using holistic payment systems can actually boost revenue.
While e-payments may seem like the most pragmatic and modern option, many middle market businesses are not fully equipped to send and receive all payments electronically. Conversely, traditional methods of payments, such as checks, are growing increasingly antiquated for many suppliers and vendors to process.
While many businesses eagerly look to switch to a digital only-model, the approach may be too narrow to be sustainable and profitable when working with a range of buyers and suppliers.
Though many finance executives are looking to become more proactive when it comes to financial strategy, outdated and antiquated processes often stand in the way of success. This is especially true when it comes to B2B payments. Despite technological innovations created to improve financial processes, a 2016 AFP survey found that the number of B2B payments made by paper check in 2016 actually increased slightly since 2013.
With the many diverse electronic payment options available to businesses today, companies have the chance to take charge of cash flow at unprecedented levels. So why does it appear that the adoption rate is stagnate?
Consider how your vendors prefer to be paid.
Executives looking to adopt electronic payments and card options must consider how their suppliers would prefer to be paid. In fact, it is often the vendors who dictate payment trends for the entire supply chain. The AFP survey cited above examined corporate payment trends and found that 51 percent of survey respondents use paper checks as their main form of payment, however antiquated the process may seem.
It is unlikely that one payment solution will become so popular that it would render all others moot. Though a slim majority of respondents claimed paper checks as their main form of payment, 49 percent of respondents still prefer to be paid through a different channel such as e-payment, virtual card or ACH. Buyers must be flexible to the needs of their vendors.
In order to accommodate a wide range of suppliers across the supply chain, B2B payment solutions should be holistic and support multiple payment options. However, implementing an inclusive and diverse payment system can often muddy the water of payment visibility if not done correctly. Executives must insure that all new systems and processes are fully streamlined through the implementation of cloud-based, automated back-end processes platforms for Accounts Payable and Accounts Receivable departments.
The key to lucrative adoption of holistic, streamlined payment processes lies in introducing a system that is open, scalable and flexible. Automated, cloud-based systems can accommodate existing data and integrate all new data dealing with a business’s B2B payments to boost a business’s profitability.
See how an end-to-end automated payables solution helps you recoup time, tools, and money.