The year 2017 is all of two weeks old. But it’s never too early to think about what comes next in payments. The B2B realm may be somewhat slow in making the transition away from paper to manage receivables and, by extension, cash flow. But changes are afoot in B2B indeed, aided by technology, and some will appear more quickly than others.
PYMNTS interviewed Dave Yohe, vice president of marketing for BillingTree, to get a sense of what lies ahead for payments and for B2B in the near term. The overarching theme, said Yohe, “is to reduce the friction or the delay in payments,” and in a B2B setting, that means getting information to the end decision-makers and observers, including controllers who look at the books, CFOs and the like.
One way to make sure that cash flow is optimized is to manage accounts receivable processes with speed, said the executive. One boon could come from the movement away from standard ACH activity, which, in terms of mechanics, can take one or two days to settle. In essence, firms may be on the hook, scrambling to find new ways to get paid, if settlements don’t go through (because payors do not have enough cash on hand to cover the payment). The use of paper checks, sticky as it may be, is inefficient even as businesses hew to the old practice of “floating” checks via mail, timing the likely cashing of those checks against funds that are arriving in corporate coffers.
And yet, the emergence of the Same Day ACH initiative, said Yohe, can help B2B transactions move smoothly, without the wait seen otherwise. In one use case, he said, a utility company can find out quickly if a payment is going to be declined and, should that be the case, make alternative arrangements with users. In addition, within a business itself, payroll and other expenses can be covered by Same Day ACH payments, ensuring smooth operational consistency.
The inexorable rise of mobile payments also might help change the way B2B works, as multiple payment methods can be controlled at a single point of contact on a single device, said Yohe, and financial decision-makers can “identify each account that they want to use to pay” suppliers and other entities, stretching, for example, across checking accounts, corporate credit cards (using the advantage of a 30-day float until payments are due) or other accounts. In other words, said Yohe, businesses, especially smaller businesses, are likened to the way a household may run its finances, picking and choosing among which accounts are used for payments, when and where.
Accounts receivable can be managed effectively, said Yohe, as other tech-driven aids to payments also take shape. Consider the virtual negotiation (typically the purview of B2C but extendible to B2B), where payment terms may be at issue. Collections efforts are necessary, and where interaction via portal can take place, said Yohe, businesses can find common ground on partial or staggered payments.