Categories: B2B Payments

Accelerating B2B Payments Through AR-AP Convergence

In today’s digital world, automation is key to efficiency. But as more businesses embrace the cloud, they’re also recognizing the complex ways one process or platform intertwines with another.

That’s increasingly true for platforms that connect with the portals of their business partners and customers. In a recent conversation with PYMNTS, Bectran Business Development and Implementation Manager Dominic Biegel reflected on the deepening relationship between an organization’s accounts receivable (AR) operations and its clients’ accounts payable processes.

Technology that aids in the collection process has a role to play in helping the customers of a business embrace electronic payments, for instance. Biegel also pointed to technology’s impact on other payment behaviors, with automated payment reminders and collections initiatives bridging AR and accounts payable (AP) operations from one company to the next.

Below, PYMNTS explores some of the newest tools in the accounts receivable and accounts payable arena that continue to bridge the gap between the two functions.

Goldman Joins SAP Ariba Network

Goldman Sachs recently announced that it will offer its Global Payments capabilities on the SAP Ariba Network, a solution designed to enable faster, more affordable cross-border B2B payments. The Network currently includes millions of suppliers across the globe, the companies noted, and is able to ease both the payment process for businesses on the accounts payable side, as well as the collections process for vendors on the accounts receivable side.

With the addition of Goldman Sachs Global Payments, the AR-AP divide can be further closed even across borders, with suppliers able to accept payment in their own currency, and payers able to gain deeper visibility into the progress of a transaction as well as access more affordable and transparent fees.

Western Union Targets Law Firms

In another initiative aimed at accelerating suppliers’ order-to-cash cycles by easing friction for payers across borders, Western Union Business Solutions recently announced the launch of WU Incoming Payments for Legal. The solution targets U.S. small and medium-sized law firms looking to ease the pain of accepting costly transactions from clients across borders.

The solution sits between the law firm and those customers, enabling law firms to invoice via Western Union Business Solutions. Western Union Business Solutions will collect payment in that local currency, and once the funds hit an account, Western Union Business Solutions will then migrate that money to a law firm’s account in U.S. dollars.

Esker, Fuji Xerox Wield APAC’s PEPPOL Network

Business process automation firm Esker announced an expanded partnership with Fuji Xerox in a deal that will expand the accounts receivable collaboration between the two firms across Asia Pacific. In the announcement, the firms noted they will facilitate eInvoicing capabilities compliant with PEPPOL (Pan European Public Procurement Online) standards, a feature that can take advantage of streamlined data sharing between businesses within the PEPPOL network.

Esker noted that it can both send and receive invoices to any business within the PEPPOL network, key for Fuji Xerox’s clients in Singapore, where the government has adopted PEPPOL for its business-to-government invoicing. By breaking down friction that separates buyers and suppliers, the businesses noted they can accelerate the invoice-to-cash cycle.

1st Commercial Credit Discusses Payables Finance

Trade financing platforms are increasingly finding themselves as the connector between accounts receivable and accounts payable, though not all of these financing products will work for everyone. Supply chain financing, in which a buyer requires a supplier to accept a discount in exchange for early payment financed by a buyer’s bank, has been hit with growing criticism.

Yet according to 1st Commercial Credit President Raul Esqueda, this kind of payables financing — if used appropriately and responsibly — can be effective at supporting healthier cash flow on both ends of a B2B transaction.

“They need to have sufficient cash, they need to be financially strong,” he told PYMNTS of the businesses that will benefit most from supply chain finance. “You can’t be doing this with buyers struggling to pay their bills.”

Nexus Enhances Real Estate Supplier Collaboration

Real estate procure-to-pay software provider Nexus is targeting supplier collaboration with its new online platform, NexusConnect, the company recently revealed. The portal allows real estate companies to more seamlessly access pre-vetted vendors from which to make purchases, while also allowing those suppliers to connect with buyers and transact electronically.

The NexusConnect platform sits between the buyer and supplier to facilitate the exchange of invoices, insurance documents, purchase orders, and payments via NexusPayment, the company noted, with Nexus President and Chief Innovation Officer Jennifer Coolidge saying the solution was designed with “feedback from both our buyers and suppliers.”

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The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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