The payments delays and errors common in B2B transactions stem from many sources, but a leading factor is a reliance on manual payments processes such as checks.
Errors can crop up at any point when paper checks are involved, from mailing to receiving to processing. These issues can range from typos to post office delays to improper data entry, according to the AP Automation Tracker, a PYMNTS and Beanworks collaboration.
Get the report: AP Automation Tracker
Further complicating the use of paper checks is the record number of employees now working from home.
All of this can have massive downstream consequences that damage businesses’ relationships with their vendors and suppliers. They can also cause businesses to lose perks, such as discounts or speedy delivery of products and services, and they often even lead suppliers to refuse to work with a business again.
Reducing Delays and Minimizing Errors
Payments digitization can go a long way toward reducing delays and minimizing errors by delegating day-to-day processes such as payables, invoice processing and record keeping to artificial intelligence (AI)-based solutions.
This could significantly reduce the capacity for human error and accelerate complex calculations that tend to be tedious and time-consuming for human accountants.
Automating those processes means that recurring payments can be set up to pass through from invoice to payment with approvals of the purchase order already in place.
“You should be able to take the invoice all the way through to payment and have one person at the end make sure that ‘yes, all the dots lined up,’” Beanworks CEO Catherine Dahl told PYMNTS in an interview. “There are dashboards on a daily basis where the accounting team is managing the process, but they’re not doing the process.”
Shifting payments away from checks to automated digital transactions can provide a multitude of improvements throughout a business’s operations, including improved efficiencies, better working capital management and cost reductions.
Reaping the Benefits
In addition to improving supplier relationships, digitization can improve customer relationships. For example, payments digitization can make a business’s payments operations more transparent, allowing it to implement online portals that help customers view their payments journeys more holistically.
Customer relations can become more collaborative through this digitization, fostering an improved sense of loyalty and potentially driving improved conversion rates.
Payments are the lifeblood of any business, especially those that work with vendors to transact for goods and services.
For these businesses, B2B payments are such a ubiquitous, day-to-day reality that the businesses stand to gain innumerable benefits by taking these payments digital.
Chief financial officers (CFOs) are looking for any solution that can reduce payment delays and errors, and they are finding that automated and digitized payments systems show immense promise.
What’s more, automating and digitizing payments and the processes that surround them could allow accounting staff to focus more on big-picture operations, improving the company as a whole.