B2B Payments

Agility Makes a Difference in Corporate Payments

Companies can lower costs and boost innovation within payments functions, says the Hackett Group’s Lynne Schneider — all it takes is some nimbleness.

What makes a company truly stand out from the pack? True distinction does not necessarily come from brand names or world dominance in a market — not every company can be a Coca-Cola or McDonald’s. But every company can find ways to improve process and follow-through, so much so that the whole operation can be positively impacted. And, in the case of payments, expenses and cash flow can be improved, too.

The Hackett Group, a consultancy that offers benchmarking and best practices research and recommendations, stated in a report over the summer that, within the finance industry, companies it would define as “world class” prove to be far more responsive to internal business needs than their peers, which, overall, means that they spend 40 percent less on running operations and do so with half the staffing levels of the competition.

In a recent interview with PYMNTS, Lynne Schneider, senior director of research for the firm, helped place these findings in the context of payments and the functions that define the cash flow, travel and expense components of a firm, regardless of industry. By way of example, in The Hackett Group’s research, “expense gaps” between the best-of-breed companies and their peer groups existing on an international basis within the finance realm can be most immediately tied to a few areas of (perhaps eye-popping) disparity. Among the standouts: The gap between best/peers remains at 85 percent in customer billing, 70 percent in travel and expense and 68 percent in accounts payable. All processes seem ripe for reconsideration.

Healthy companies, said Schneider, are “agile, the opposite of rigid, of course, and they are able to not just react quickly to change but also to anticipate change.”

Three pillars rest within an organization that is able to weather the seas of change proactively, according to Schneider. There needs to be a strong foundation in the finance function within day-to-day operations. Any firm striving to break out from the pack also needs to be able to sort through, categorize and make use of the data deluge that comes in that needs to be structured and analyzed. And finally, the alteration in the mindset of an organization itself can be set in motion to accept incremental changes and, at the same time, continuous change.

Referring specifically to billing, Schneider said that decision-making can be simplified if a goal is simple to begin with and can be conveyed across all stakeholders within the company, such as in the case to convert a bill to cash through a 45-day cycle. In terms of foundations, said the executive, there may be need for a more cohesive system or, for a far-flung company, a set of systems.

The questions must be asked, answered and used to support new communications and even processes. Hypothetically speaking, an organization may find it needs to feed different data to its sales force or may find that warehouses that send shipments in separate stages may be inadvertently causing inefficiencies in the billing process. Institutionalizing change, said Schneider, has to come from people who work across each function and who have problem-solving mindsets that go beyond just day-to-day processes.

When it comes to travel and expenses, said Schneider, the leading organizations go beyond “exception-based review” — i.e., when, say, spending thresholds are breached or the wrong suppliers are used to book flights or accommodations — in an effort to, again, simplify both process and review.

Accounts payable functions can benefit from a movement away from what Schneider termed an “automation gap” that stems from the fact that some professionals may have issues over using data properly and consistently. The more functions that can be automated for this segment of the cash cycle, the better, said Schneider, though she cautioned that across global companies — operating across, say, the Americas, Europe and Asia — not every piece of the process can be done the same way, especially in B2B.

Honing practices with continuous improvement, said Schneider, means that “little things accumulate over time, and this leads to evolution ... The best keep getting better.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.