How B2B Payments Can Benefit from Going Digital

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How B2B Payments Can Benefit from Going Digital

Sarah Dawson, CFO Tech Outlook | Thursday, April 22, 2021

Digital can enhance back-office efficiencies and help fuel business expansions.

FREMONT, CA : Digital business-to-business (B2B) payments are overtaking paper-based processes, which isn’t fast enough in a real-time-obsessed business world. Enterprises need to get faster. More firms now expect their marketplaces and providers to work with the digital systems and payment types they prefer rather than holding on to outdated methods. Facilitating this B2B personalization is vital to helping B2B marketplaces and other players in the global B2B space stay competitive. Here is how digital supports can enhance back-office efficiencies and help business expansions.

Firms are waking up to these issues and looking to swap out paper payment for easier digital options. A recent survey found that 39 percent had switched over to electronic payments in response to the health crisis and that an additional 26 percent planned to do the same. eSignature technology is a tool that can be a game-changer for businesses. These tools free up approvers from process paper and let AP teams skip the wait for checks. eSignature instead allows staff to digitally sign off on payment approval requests and other documents that they get remotely. Such tools can make B2B payments more convenient but may not go far enough toward removing hurdles for all corporate buyers.

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Enterprises that digitize their AP operations can reap myriad advantages, saving their time and freeing them up for other tasks while also paying vendors quickly and accurately, bridging better supplier relationships. Digital tools for interpreting invoices and approving and providing payments can lay the groundwork for smoother business evolution. Businesses should attend to frictions impacting the accounts receivable (AR) sides of their processes. Several have found that issuing paper invoices can have undesirable effects on the timelines for getting their revenues.  Implementing digital systems for creating and sending invoices could help the speed and accuracy of AR work. Switching to PDF invoices sent through email or transmitting electronic billing data directly to customers for quick processing can boost timelines. Using automation tools to create invoices could also boost speed and accuracy.

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