B2Bs Seek Painless Month-End Account Reconciliation Without Painful Integration

Seamless collaboration among ecosystem partners after underdoing operational modernizations is critical to successful B2B transactions.

This, as businesses are increasingly setting up next-generation payment networks and optimizing their internal systems to tackle historical problems around billing and invoice reconciliation frictions.

PYMNTS research in the “One-Stop Bill Pay Playbook” finds that 30% of billing and collections executives are only somewhat satisfied with their organizations’ current bill payments ecosystem, and a majority (68%) expect to incorporate digital-first innovations to help address recurring inefficiencies afflicting transactions, such as one-stop-shop solutions, within the next year.

Certain businesses, including mega retailer Walmart’s Canadian arm, are turning to blockchain-based enterprise solutions to resolve their invoice management speed bumps and remove data discrepancies resulting from siloed systems unable to properly communicate with each other.

Walmart Canada delivers over half a million shipments to its distribution hubs and retail storefronts each year, using a combination of the company’s own trucking fleet as well as third-party carriers. There was only one problem in this setup — data discrepancies kept derailing the invoice and payment process for these freight carriers.

The problems, common to the transport industry, consistently caused costly reconciliation efforts and long payment delays across both sides of the transaction for a reported 70% of invoices.

By implementing a blockchain-based invoice management system that allowed previously siloed systems to communicate better without the need for manual reconciliation, Walmart Canada was able to deliver a 98.5% reduction in disputes with its transport partners.

Read more: Payments Technology's Future: Retailers, Manufacturers Seek Better Workflows

Still, that one-off result doesn’t mean that blockchain-based tools necessarily represent capturing lightning in a bottle for companies facing reconciliation pain points.

Onboarding vendors, suppliers and other third parties for blockchain-based platforms requires a large upfront investment from both sides, and business partners often need to be educated around the emergent technology and upskilled around integrating blockchain into preexisting systems.

As a direct result of these integration frictions, IBM and Maersk have wound down their multi-year blockchain system, TradeLens, which aimed to share supply chain tracking and accounting information.

A public announcement of the platform’s discontinuation stated that “the desired level of cooperation and support has not been possible to achieve at this point in time.”

Blockchain, after all, is reliant upon adoption on both sides of the B2B transaction — and that adoption is itself reliant upon ease of use and integration, as well as a compelling return on investment (ROI).

Digital Solutions Drive B2B Buy-In

Using a B2B payments network should be as simple as connecting to an API, with connections between buyers and suppliers seamless and automatic.

PYMNTS research finds that among the top complaints of B2B payors are confusing payment interfaces, or missing features, on the side of the payees.

Buyers that use new portal-based services and unfamiliar file formats can slow suppliers’ ability to send, manage and track invoices.

For the payees, confused bill-payers often reach out to customer service for help and explanations, and disparate systems increasingly require laborious and costly manual reconciliations that delay access to funds.

More than 1 in 3 executives (35.5%) cite manual reconciliation as their most frequent B2B headache. Other common headaches for the surveyed executives include automatic payments being declined due to invalid credentials, customer service calls from confused vendors, and payments bouncing due to insufficient funds.

As businesses upgrade their own internal operations, it is important to ensure that their vendors and partners are similarly prepared to take the jump forward with them.

Using artificial intelligence (AI) to power a B2B accounts receivable (AR) and accounts payable (AP) payments network offers one way for organizations to solve for these integration frictions and payment pain points.

That’s according to research in “The AR Transformation Solution: Easing And Accelerating Payments From Business Customers,” a 2023 PYMNTS report, which finds that AI-driven AP/AR platforms allows organizations to offer their buyers payment choices without requiring them to upgrade their systems or use a separate portal, while simultaneously streamlining payment management processes and giving businesses faster access to cash.

Not only that, but the digital architecture of these B2B networks allow for AP/AR scalability and, critically, increased transparency over cash flow and offer increasingly actionable insights over real-time working business realities.