Those considering payments modernization typically identify six common areas that need a new modern approach to AP/AR, according to “The Future Of Business Payables Innovation,” a PYMNTS and Plastiq collaboration based on a survey of 500 SMBs and payables and receivables executives with SMBs as clients.
Get the report: The Future Of Business Payables Innovation
A Modern Touch
First, there’s the manual review of invoices. When invoicing processes are not automated, SMBs lose visibility into cash flow, as well as control over liquidity. Manual invoice entry can cause errors that lead to more time spent correcting incomplete payments.
A second area that might need a new approach is the high cost of payments and credit. When payment choice is not available, SMBs may resort to high-cost credit options or fee-heavy payment methods to make the purchases they need.
Advertisement: Scroll to Continue
A third issue may be a lack of AP/AR integration with other systems. When AP/AR data isn’t integrated with other core business systems, SMBs can lose time manually entering data and run the risk of errors that corrupt cash flow forecasting.
A fourth concern might be having no single view of cash. At the end of the day, accurate data drives fruitful business decisions. When SMBs have access to a single view of their cash, they can create long-term growth strategies based on accurate forecasts of cash flows and current liquidity management options.
Fifth, SMBs may find that they have a lack of payment choice for buyers and suppliers. More ways to pay means more control over cash flow for buyers and suppliers, and better payment choices for SMBs can significantly impact their bottom lines.
Last, SMBs might want more flexible, multichannel payment acceptance tools. SMBs can benefit from modern payment acceptance that enables them to easily capture payments in-person, online via pay buttons or embedded checkout, in an ordering portal, or from a sharable payment link that they can add to paper and digital invoices.
Modern tools allow flexibility so that SMBs can pass on the credit card processing cost — or any portion of it as negotiated — to willing consumers.
Improving AP/AR Management Efficiency
If any of these areas are problematic for an SMB, payment modernization could be the next logical step.
According to PYMNTS research, most executives of AP or AR software companies believe their business customers would be interested in the choice and convenience of an automated, all-in-one payments solution.
Such a solution takes shape as an embedded finance offering within platforms and marketplaces and enables multiple ways to pay any supplier via any payment method. In addition, back-office functions can become streamlined, as Plastiq Chief Operating Officer Stoyan Kenderov told PYMNTS in a recent interview.
“We live in the 21st century,” Kenderov said, “and we have technology that can take care of all the things that people have been doing through manual means.”
Read more: How All-in-One Platforms Can Lower the Cost of SMB Payments
