Payments Automation Helps Main Street Navigate Economic Challenges

Companies that invested in technology to improve working capital transparency during the pandemic saw overwhelmingly positive results. Seventy-seven percent of surveyed CFOs said they saw improved processes from working capital and credit digitization.

However, the current economic crisis is exposing where transparency blind spots continue to create issues. Payments and cash flow troubles exacerbated by the banking crisis are an ongoing global problem. For example, 49% of subcontractors wait an average of 30 days for payment from general contractors.

As companies struggle to meet more obligations with less working capital, there is no room for lag in accounting processes. The “B2B and Digital Payments Tracker®” explores working capital transparency and how automation and digitization impacts it.

Around the B2B and Digital Payments Space

Small to midsized businesses (SMBs) are caught between a rock and a hard place, with average hourly wages rising as small businesses attempt to avoid raising prices on goods and services. With many companies slowing or freezing hiring, pressure is mounting to find alternative areas to cut expenditures.

Better enterprise resource planning (ERP) systems integration could help companies involved in cross-border payments. A recent survey showed respondents wait an average of 97 days for payment on cross-border purchases made on credit. Most said their ERP systems do not have equal functionality between international and domestic receivables.

For more on these and other stories, visit the Tracker’s News and Trends section.

Minding the Details in Working Capital Transparency

It is not enough to have the right tools and data. Organizations also need fully integrated systems and a common vernacular to ensure that data does not get siloed.

To get the Insider POV, PYMNTS spoke with Nathaniel Katz, CFO at eCommerce software provider Rokt, about the importance of shared data and integrations in ensuring that automation tools improve working capital transparency.

Eliminating B2B Payments Pain Points

Reliance on manual processes, lack of transparency in payments and lack of systems integration create issues on both sides of B2B payments. Forty-seven percent of surveyed suppliers need more transparency in payments, while 39% say they need greater systems integration. At the same time, 45% of payors say manual reviews hold up payments.

Companies could ease these difficulties by automating payments, but many underestimate the benefits of doing so. While just 32% of companies that do not use enhanced automation believe doing so would improve transparency, 49% of those using it list transparency as a top benefit.

To learn more about how better automation and integration can help companies adjust to economic challenges and exploit opportunities, read the Tracker’s PYMNTS Intelligence.

About the Tracker

The “B2B and Digital Payments Tracker®,” a collaboration with American Express, examines working capital transparency and how automation and digitization impact it.