One of the simplest ways to create growth within an organization is to identify an important, underdeveloped field. This sounds a bit paradoxical, seeing how the most relevant fields are usually the ones getting the most attention. Digitalization seems to be an exception to this rule. Even though its benefits are virtually endless, many entrepreneurs are still failing to take full advantage of it. Implementing it in the field of B2B payments may impact your organization in so many positive ways. Here are several most prominent examples.
How Important Are B2B Payments?
The approximate volume of all B2B payments amounts to about$120 trillion every year. This alone would be enough to explain the importance of digital adoption in this field. The majority of businesses in 2021 don’t work with just one big client. Instead, the structure of their account receivables tends to be a lot more complex. The same thing goes for their account payables. Therefore, a chance to automate and streamline these fiscal orders may lead to a significant workflow improvement.
This would also minimize the margin of error, seeing how an automated process will never miss a deadline or make a mistake while filling out the amount. In a case where such a thing would lead to a massive misunderstanding or a fee (a late fee, for instance), this would save quite a bit of resources for the company in question. In the world of B2B, accountability and efficiency come first, and automating payment processes can improve both of these fields.
The next thing worth mentioning is the automation of the overall workflow with the use of tools such as M-Files. Keeping all records regarding B2B payments and interactions is vital from an operational and legal standpoint. This allows the management to go forward knowing full-well that all their previous interactions with both partners and suppliers are documented and easily accessible. Getting all of these records on-demand without having to sort them manually and memorize where they’re being stored (and in what format) is incredibly relevant.
Other selling points of this workflow automation are deepening customer relationships, answering demand, and driving revenue. Through virtual card acceptance and utilization, mid-sized businesses will be able to get ahead of the curve and bring their logistics, sales, and accounting in sync.
Facilitating Your Own Logistics
The chances are that the majority (if not all) of your suppliers are domestic businesses. This would mean that all your payments to them are B2B payments. Entrusting this to a reliable autopay option can facilitate all payment types. This way, you can get a chance to handle virtual cards, ACHs and even check payments through a single interface. Moreover, it’s worth noting thatcredit cards play a huge role in B2B financial interactions. Also, this gives you more flexibility and allows you to accommodate your supplier even further. You can do this by identifying their preferred payment type and using it to make these fiscal interactions more satisfying for all parties involved.
Defining B2B Payment Trends for 2021
As we’ve already mentioned (and will discuss further), digital automation is no longer optional. The advantages that stem from this are numerous and offer logistical support in many relevant aspects. This also directly leads to the second significant advantage – paperless invoices. Other than just being eco-friendly, these invoices are also quicker and easier to respond to. Seeing as athird of all B2B transactions already come in a digital form, this won’t be a change that’s too difficult to get accustomed to. This is especially true since 60% of respondents show readiness to switch to electronic payments.
The remittance problem is a serious issue of failing to match the payment to a relevant invoice. This is because traditional systems operate to make remittances travel separately from payments to open receivables. In fact, this is seen as the biggest reason why some businesses still seem reluctant to adopt (clearly superior) electronic payments. The absence of standard formats makes this even more difficult, especially if there’s no plan to integrate these payments with an adequate accounting system.
Solving Account Receivable Problems
Smarter handling of your account receivables, especially digitalizing them, will inevitably help you solve some of the most persistent B2B payment problems. Late payments, data management, time management, customer management, and even cash management can all be solved using a proper B2B payment solution. Some AR teams still accept paper checks, which causes problems with cash flow. This is particularly important since your business needs to burn cash on operational expenses on a regular basis.
Another advantage of digitalizing your B2B payments is that it provides you with a scalable growth model. The greater the number of payments, the more complex it is to oversee them personally and manage manually. This is why digitalizing before embarking on the next B2B marketing campaign is such a great idea. For instance, if you were getting ready for amassive B2B outreach campaign, laying down the digital infrastructure ahead of time would be a logical course of action. Every successful marketing campaign leads to an increase in workload. In this case, it also increases your B2B payments in both volume and number. Being ready for this should be a top priority.
Traditional invoices come in a paper form, which is why a reduction in paper invoice volume would lead to a more sustainable business model. This brings a couple of hidden perks to the table, as well. As we’ve already mentioned, digital invoices are easier to manage and browse. From the perspective of your company’s brand image and PR, you get the privilege of labeling yourself as green (at least in this aspect). This means that if other businesses you’re collaborating with hold environmentalism in high regard, this could earn you quite a few additional networking points.
High-Tech Solutions to The Rescue
One of the most important things to mention is that the future of B2B may be forever changed by some of the recently emerging high-tech trends. For instance, it’s clear to everyone how robotics process automation (RPA) and application programming interfaces (API) may reshape the landscape of B2B payments.
On the other hand, people are less certain about what AI-development and deep-learning will do for the future of digital payment processing and, therefore, B2B payments as a whole. One thing that seems inevitable is the improvement of document processing and reconciliation and the overall user experience.
In the end, it seems like it all comes down to innovation and automation of payment processes in B2B interactions. With the help of digitalization, this process can be improved to everyone’s benefit. This way, it will provide greater reassurance, the interactions will become faster, and the margin of error will be drastically reduced. This model is also eco-friendly and sets up businesses for scalable growth in the future. A single one of these advantages would be hard to ignore. Together, they make a force to be reckoned with.