B2B Payments

AR's Role In Accelerating AP Processes

Legacy accounts receivable (AR) and accounts payable (AP) operations aren't only inefficient, they're costly.

PYMNTS' latest The Optimizing AP and AR Playbook, a collaboration with OnPay Solutions, found that businesses in the U.S. could save 19 hours a week through automating eInvoice processing — and, according to the Federal Reserve, businesses are spending $9 billion every year on paper invoices.

Digitizing AR and AP can help eliminate those unnecessary costs. As AP and AR innovation progresses, FinTechs are also exploring how integrating AP and AR between buyer and supplier can elevate efficiencies and savings even further.

This is particularly important in today's environment, according to Bottomline Technologies CEO Rob Eberle. He told Karen Webster in a recent conversation that coronavirus disruption will likely become a catalyst to B2B payments digitization as AP departments are forced to operate entirely online. Managing receivables will be key to alleviating suppliers' cash flow needs on the AR-end, too.

"The other piece that’s coming out of this is the importance on the vendor side of the visibility into receiving payment,” said Eberle. “If it’s not already, this will be a liquidity crisis for many firms. They’re asking, ‘When am I getting paid? Do I have visibility into that?'"

Below, PYMNTS looks at the latest initiatives designed to strengthen buyer-supplier relationships through AR-AP connectivity.

Upflow On AR's Role In Late Payments

While late payments is often discussed in the context of AP friction, Upflow Co-Founder and CEO Alex Louisy recently spoke with PYMNTS about the role AR plays in accelerating a company's own payment cycles.

Ongoing use of Excel spreadsheets to manage outstanding invoices adds to disorganization and friction for suppliers' corporate customers and their AP operations, he noted. Improving B2B payment processes means addressing challenges on both the AR and AP side of a B2B transaction.

"Unless someone brings a 10-times-better user experience to both sides of the transaction, it's not going to improve," said Louisy.

Weave Eyes Value Of Payment Choice

In a recent research report, small business payments technology company Weave found that firms that offer choice in how their customers pay are able to increase revenues by as much as 30 percent, with the company highlighting the benefits for both buyer and supplier of an array of payment options.

"As a business owner, the more convenient you make it for your customers to pay you, the more often you will get paid,” said Weave Chief Product Officer Jeff Lyman in a statement announcing the research.

The findings echo the role that AR plays in easing AP friction: B2B suppliers able to offer choice to their corporates makes it easier for AP teams to pay the bills.

Pactum Finds Buyer-Supplier Common Ground

A key aspect of AR-AP connectivity is the relationship between buyer and supplier, with B2B contract negotiations an important part of ensuring that AR and AP teams ultimately find success through B2B payment agreements that work for both sides.

Pactum CEO Martin Rand told PYMNTS in a recent interview that these negotiations can often land on the back burner, especially for large corporations managing thousands of smaller, long-tail suppliers. By wielding automated technology, he said, buyers and suppliers can even out the leverage to ensure that both sides of the B2B transaction benefit via pricing and payment terms that support everyone's goals.

Tradeshift Emphasizes Supplier Engagement

Supply chain payments firm Tradeshift is embracing the buyer-supplier relationship with its new Tradeshift Engage solution, a platform that enables buyers and suppliers to collaborate and communicate.

As a result of remote working requirements, businesses that rely on paper-based processes are facing extra friction, according to Tradeshift Vice President of Network Tony Alvarez. Tradeshift Engage aims to strengthen the buyer-supplier relationship by empowering vendors with data based on their corporate customer relationships, allowing for payables financing, real-time transaction monitoring, eInvoicing, fulfillment, ordering and other features for both AP and AR teams.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

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.

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