Human Touch Is Secret Weapon Behind B2B Payments Automation

The B2B market is made up of countless mini-markets full of disparate buyer-supplier networks and fragmented industry verticals, each with its own preferences for how it likes to pay and be paid.

There are nearly as many minute payment preferences within the B2B space as there are businesses. What works for one firm is not guaranteed to work for another, particularly if the two firms in question differ in size, scale or even operating region.

While automation and digitization continue to transform the over $120 million addressable B2B payments market, the benefits that accounts payable (AP) and accounts receivable (AR) modernizations bring are far from becoming commodified.

The benefits of AP and AR programs are increasingly being personalized as B2B firms across both sides of the transaction look to ensure a seamless payment experience, one that can help drive repeat business.

While the digitization of the B2B space has provided new value-adds and innovations that can help firms optimize and enhance incumbent and emergent buyer-seller relationships with flexible payment and financing solutions, there is still no replacement for a high-touch human representative when it comes to managing disputes and untangling reconciliation complexities around high-value transaction tickets.

Read also: Will 2024 Be the Year of Win-Win Buyer-Supplier Dynamics?

How the Right B2B Payments Workflows Can Help Firms Grow

The B2B landscape is undergoing a foundational, and even generational, shift driven by technological advancements and changing expectations. This shift is seeing firms increasingly look internally toward reevaluating their payment processes as they come to recognize the strategic importance of adopting digital and automated solutions.

As many as 40% of B2B payments are still made with paper checks, and 81% of companies still pay other enterprises through those paper-based channels. This manual and paper-driven nature of B2B payment processes not only hinders efficiency and inhibits a smooth transactional experience, but it could also be costing firms repeat business from customers who are being provided with more seamless engagements from other suppliers.

Given the paper-based and manual realities of the marketplace, firms can jump into rarified territory by undertaking an AP/AR transformation. Suppliers that make it easier for buyers to do business with them often find those buyers to be more loyal, and vice-versa.

For AP departments, modernization efforts often center around automating invoice processing, streamlining approval workflows, and optimizing cash flow management.

This might involve implementing electronic invoicing platforms, using machine learning algorithms to extract data from invoices, and integrating with enterprise resource planning systems to facilitate seamless data exchange. By digitizing and automating these manual tasks, businesses can reduce processing times, minimize errors, and gain real-time visibility into their financial obligations.

See also: The Trickledown Consumerization of B2B Payments Helps Firms Win Business

On the AR side, the focus is on accelerating payment collections, reducing days sales outstanding (DSO) and improving cash flow predictability. This could entail offering flexible payment options such as electronic invoicing, credit card payments, ACH transfers and even emerging technologies like blockchain-based solutions. Additionally, AR teams are using data analytics and predictive modeling to identify patterns in customer payment behavior, allowing them to proactively address potential delays or disputes before they impact cash flow.

But all this workflow tooling doesn’t mean that the human element can be ignored — or replaced.

“You’ve heard the expression better, cheaper, faster,” Ben Lamm, chief operating officer at Capital One’s Trade Credit Business, told PYMNTS in August. “I think automation really helps with faster and cheaper.”

But it is high-touch human expertise and service that drive forward the “better,” he added.

Failing to Meet B2B Payment Needs Can Put Relationships at Risk

Today’s B2B buyers are increasingly seeking and finding simplified online and even multi-channel experiences as they browse for and purchase the goods and services they need. They are loyal to the suppliers who go beyond the confines of simply fostering a better billing experience.

“Not every buyer is going to pay all of their suppliers the same way … unlike traditional consumer payments where there’s a standardized way in which consumers pay and merchants get paid, within the B2B arena, no two buyer-supplier profiles are the same,” Dean M. Leavitt, founder and CEO at Boost Payment Solutions, told PYMNTS this week.

Particularly as B2B engagements move online, buyers and suppliers need to re-learn, and even unlearn, how to most effectively transact and grow their business given all the new options available.

“Suppliers are left with so many different variations of how they have to transact with their customers that it’s almost become a full-time job for them to keep up with all the different levels of sophistication from fully-integrated, automated, digitized down to smaller or less sophisticated customers that still require snail-mailed invoices and paper checks and things of that nature,” Corcentric CEO Matt Clark told PYMNTS in June.

For more information on how to identify a path forward in today’s B2B landscape, the PYMNTS Intelligence report “Accounts Payable and Receivable Trends: The Journey to Automation” unpacks the realities — and benefits — of bringing AP/AR programs up to speed.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.

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