CFOs Navigate Season Of B2B Payments Change

The B2B payments landscape has always been evolving, but change in the industry has never been more acute than right now.

With the pandemic forcing accounts payable (AP) and accounts receivable (AR) departments to hit the gas on their digitization roadmaps, finance leaders are grappling with an accelerated pace of change that can, at times, be overwhelming.

But the challenge of igniting B2B payments innovation may not be as arduous as many chief financial officers (CFOs) and others believe, said Josh Cyphers, president of Nvoicepay, a FLEETCOR company alongside Comdata.

“One of the biggest challenges we run up against when talking to companies that are still mostly on check is that they assume any kind of implementation around their payment automation will take six to nine months,” he told PYMNTS. “But it can be a lot simpler.”

As Cyphers explained, CFOs are quickly recognizing the need to change their ways across a variety of points along the B2B payment journey. And while finance leaders won’t always find an easy path to shift to digital, they can find strategic partners in their FinTech solution providers to ease the transition into the future.

The Need For Change

Once organizations understand that the process of implementing optimized B2B payment workflows in AP and AR departments won’t be as drawn-out as they’d expected, they can begin to identify key points in their workflows that must migrate away from legacy processes.

The pandemic has enlightened many AR and AP teams to this need for change as professionals struggle to continue their outdated methods in a remote work setting, said Cyphers.

“We hear all the time that it’s a challenge to process invoices and payments, and get approvals, and run the workflows when there is paper involved,” he said. “We see a lot of accounts payable teams getting the same level of demand for digital or electronic payment methods from their suppliers because suppliers are in the same situation. They have to collect payments and can’t do so efficiently by going into the office.”

The pandemic has created another pressing dilemma for organizations in their B2B payment operations: the risk of fraud.

One of the biggest challenges today is mitigating the threat of fraud while B2B payment workflows operate remotely. It’s quite common, Cyphers said, for fraudsters to use social engineering to infiltrate AP departments, pose as a legitimate vendor and request payment into their own bank account. Often, it isn’t until after a payment has been made that an entity will finally recognize the error.

Unfortunately, this risk has only elevated as professionals work from home.

“Given the economic climate and the level of uncertainty in the workplace, there’s been an uptick in criminal activity,” said Cyphers. “We’ve found that a lot of AP teams actually manage bank account data through spreadsheets or email, or in their ERP where any AP clerk has access to that bank information. That’s a very scary notion.”

It’s yet another motivation behind CFOs’ embrace of change in their B2B payment workflows through digitization, he added.

Planning For The Future

Change is never-ending, and just because an organization has adopted digital solutions to remedy the challenges of remote working and fraud doesn’t mean CFOs can hit the brakes on their digitization journeys.

Indeed, as organizations’ understanding of their B2B payment needs evolves, there will be an increased need for not only security and automation, but also for customization and efficiency — demands that Cyphers noted can be fulfilled via application programming interface (API)-friendly solutions.

Further, the payments landscape as a whole is accelerating, creating widespread shifts in the way businesses manage money. While AP departments may not have a large need for instant payments, what’s valuable about emerging real-time payment capabilities is the data that can travel along with a payment. According to Cyphers, that information can be a valuable tool in driving efficiency in reconciliation and cash application workflows.

At the same time, however, real-time payments will also change the fraud landscape as instant payments narrow the window of opportunity to catch and prevent a fraudulent transaction.

Whether organizations are just dipping their toes into the digitization journey or looking to inject further optimization, security and flexibility into their existing virtual tools, Cyphers said one of the most valuable strategies in easing the friction associated with change is to collaborate with a third-party partner that can not only automate, but optimize. He pointed to Nvoicepay’s ability to outsource workflows like invoice management and payments, as well as to manage fraud risks and implement customized and configurable controls around the invoice and payment approval processes.

As B2B payment workflows change, so do organizations’ needs and risks, and collaboration can be a key tool to adjust accordingly.

“There are all sorts of hidden risks whenever you set up processes to an entirely different, off-premise environment,” said Cyphers. “AP was really never designed to be a remote team. So, it’s really important for CFOs and AP leaders to look into how they can find outside providers to help them maintain internal controls while they’re enabling employees to work remotely.”