B2B Payments

How Linking AP And AR Can Mitigate Supply Chain Volatility

Today's market volatility has presented plenty of opportunities for the enterprise. When it comes to B2B payments and supply chain management, many of those opportunities have surfaced as a result of some troubling vulnerabilities that have come to light in the midst of the pandemic.

Today, strengthening buyer-supplier relationships and optimizing B2B payments — in terms of collections as well as initiation — is critical to the financial health of any business. This week's look at the convergence of accounts payable (AP) and accounts receivable (AR) explores how optimizing one side can have a positive effect on the other.

Analysts Eye AR Automation To Mitigate Risk

A new report from Frost & Sullivan is shedding light on the value of AR automation. In a recent press release, the consulting firm noted the value in enhancing AR strategies to mitigate the risk of a volatile market and to support consistent cash flow.

Key to the success of AR automation, however, is a strategy that "engages clients in order to collect their overdue invoices." In other words, it's a system that not only streamlines and automates processes on the AR side, but can also support the payment process on the buyer side through automatic payment reminders. This strategy, Frost & Sullivan concluded, "makes it a priority to strengthen your relationship with your customers."

Billtrust Accelerates Collections Capabilities

For AR teams, accelerating payments collection can be the biggest barrier to healthier cash flow. Billtrust recently announced the rollout of a new service to expedite the ability of AR teams to implement its Collections solution, which can go live in as few as 20 days compared to the average of 90 days.

In a statement, Billtrust President Steve Pinado said that fast-tracking Collections adoption can help connect businesses to capital more quickly in the short term, while also helping to future-proof their enterprises for the long-term, particularly as AR teams work remotely. Ensuring that accounts receivable operations can digitally and seamlessly collect payments — and that corporate buyers can seamlessly make them — is critical to supporting a healthy cash flow.

Basware Expands AP Partner Network

Accounts receivable isn't the only way to improve the buyer-supplier relationship in the flow of B2B transactions. On the accounts payable side, Basware recently announced an expansion of its partnership network to include excelerateds2p, a consulting firm that specializes in supporting business users of SAP and SAP Ariba to optimize their AP and procurement functions. In a statement, Paul Jones, excelerateds2p general manager of EMEA, said that AP is a function that can support broader goals for the enterprise.

"It’s always been our focus to ensure organizations drive real business value from their procurement and AP functions, and to ensure that they are intrinsically linked to business objectives," he said.

With strategic buyer-supplier relationships now of the utmost importance, it's not a stretch to view AP in the context of supporting deeper B2B ties through not only tackling friction in the AP department, but also optimizing payments to suppliers and supporting those partners' collections operations.

TransferMate, Coupa Talk Supply Chain Rethink

To optimize B2B payments, organizations are going to have to rethink their supply chains from the ground up. That's according to TransferMate Chief Product Officer Gary Conroy and Coupa Vice President of Product Management and Engineering Rajiv Ramachandan, who recently spoke with PYMNTS about the value of understanding key vulnerabilities in the supply chain and optimizing operations to keep B2B payments flowing.

"The opportunity is not just to replace manual processes, but also to reimagine the supply chain process from the ground up," said Conroy.

For payments, that means tackling friction for both buyers and suppliers, particularly across borders.

“Paper checks are part of the problem,” Ramachandran said. “The real problem, however, goes beyond a payment rail. It is around the visibility and auditability of the entire payment process. You'd be surprised at how many corporations have manual processes for payment approvals, and the financial authority who releases the payment has no real-time visibility into the details of the transaction for which they are making the payment.”

Addressing these pain points can mean improving the experience for all participants in B2B trade.

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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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