Piecemeal Order-To-Cash Innovation Won't Cut It For Cross-Border Commerce

The pandemic has forced businesses to pivot quickly to continue their operations — both domestically and internationally — with relative ease as the health crisis affects everything from supply chains to payment schedules. Many firms are eying new technologies that could accelerate their global B2B transactions amid these shifts.

These digital changes should pertain to more than just payments themselves, however. Success in the shifting post-pandemic global business world will require companies to adjust their order-to-cash (O2C) processes from top to bottom. The O2C process includes every aspect of the business relationship, from presale interactions all the way through the final payment, and many companies are searching for ways to bring each step into the digital B2B world. PYMNTS data shows that 39 percent of companies have moved away from manual O2C processes and toward digital ones since the start of the crisis, for example. They will need to continue innovating these processes to stay on top of shifting B2B trends worldwide.

In the latest edition of the Global B2B Payments Playbook, PYMNTS analyzes how the pandemic is affecting the O2C processes of businesses everywhere, especially those making cross-border transactions. It also examines what tools companies can tap to make these payments swiftly and securely.

Around The Global B2B Payments World

Virtual cards are seeing growing interest from B2B companies during the ongoing pandemic because they allow businesses to make and receive payments digitally with an additional layer of security. Many of these cards use one-time codes for each payment, which could prove essential for cross-border B2B transactions in the next several years. One study predicted that virtual or contactless card payments will grow to $4.8 trillion in value by the end of the year, compared to the $4.1 trillion reported in 2019. This seems to indicate that virtual cards are playing a greater role in the B2B payments space globally.

Automation is another technology that is playing an increasingly prominent role in international B2B transactions, especially as companies struggle to balance reconciling documentation with their clients’ and business partners’ faster payment expectations. Bringing automation into one’s accounts payable (AP) and accounts receivable (AR) processes can help firms bring payments up to speed and reduce the overall time it takes to process and finalize transactions. One study focusing on AP automation found that many firms are growing frustrated with manual payments, with 54 percent of large firms and 65 percent of smaller ones agreeing that such payments are time-consuming and error-prone. Introducing solutions that can mitigate those frictions is thus becoming more important to businesses of all sizes.

Clinging to manual payments is proving costly for firms conducting business internationally as well as domestically, Jeff Freese, certified public accountant and controller for California-based construction firm Nevell Group, explained in a PYMNTS interview. The group previously spent about $50,000 annually just to mail out paper check payments, Freese noted, before it switched instead to making these transactions via virtual cards. The continuing global health crisis has helped shed light on the costs of check-based or manual payments for other firms, Freese continued, which can hopefully prompt businesses to switch over to less time-consuming and expensive payment methods.

For more on these and other stories, read the Playbook’s News & Trends.

BoxFox On Why Order-To-Cash Innovation Is Key For Businesses Expanding Globally

Business has continued to grow more global even as the pandemic affects the purchase and sale of goods worldwide, with more companies seeking to expand into international markets. Firms seeking to develop new cross-border relationships are also adjusting to a world in which many traditionally manual B2B processes must occur virtually due to the pandemic’s impact.

Companies must therefore approach their O2C processes with a new, holistic strategy in mind to stay successful in this changing global, digital B2B world, Nick Shaffer, CEO of online B2B marketplace BoxFox, explained in a recent PYMNTS interview. To learn more about why businesses must change their O2C strategies to successfully compete in a more digital B2B world, visit the Tracker’s Feature Story.

Deep Dive: Why Automation Is Becoming Critical For The B2B Cross-Border Order-To-Cash Process

Keeping every part of the O2C process moving smoothly is difficult even during typical circumstances, but it has become only more challenging during the health crisis. Difficulties have abounded for cross-border companies, as these firms must juggle payments being made in a multitude of methods and currencies while staying on top of pandemic-driven financial shifts.

Technologies such as automation or artificial intelligence (AI) could help these businesses cut down on costs and better manage international payments’ complexities, so long as they are strategically applied. To learn more about how the ongoing health crisis is affecting the global B2B firms’ O2C processes and how automation can help, read the Playbook’s Deep Dive.

About The Playbook

The Global B2B Payments Playbook, a PYMNTS and Worldpay collaboration, examines the latest headlines in the cross-border B2B payments space and why businesses are gravitating toward digital solutions to maintain seamless and robust global business relationships.