The COVID-19 pandemic is inspiring many businesses to accelerate their shifts to digital transaction methods as workforces operate remotely from home, and many are finding that doing so is helping them overcome traditional business-to-business (B2B) payment frictions. Companies long-used to sending and receiving paper invoices and checks are finding that digital methods can deliver funds and billing information at a far faster clip.
However, businesses need to change their systems and practices before they can take advantage of more modern payment tools. This could mean adopting new accounts payable (AP), accounts receivable (AR) and other treasury strategies and technologies, for example. The November CFO’s Guide To Digitizing B2B Payments explores how businesses are navigating these technology adoptions and finding secure, cost-effective ways to upgrade their B2B transactions.
Around The B2B Payments World
B2B payments automation can save companies valuable time and make it easy for employees working from home to process invoices and reconcile payments. This could encourage many firms to adopt these updates, with a survey of AP professionals finding 20 percent expect companies to invest more in AP automation going forward.
Companies increasingly expect instant payments, but this can be difficult to achieve. Businesses in China appear to be struggling to keep up the pace of transactions and recent reporting finds that B2B payments in China on average take twice as long to complete now than they did in 2015. This could partly be the result of companies negotiating for longer payment terms due to financial strains from the pandemic.
Late payments are painful to companies and a recent report shines a light on these issues in the denim industry. Many companies in the sector are delaying vendor payments, which results in those vendors paying their own suppliers later in turn. This can cause long-lasting damage, with one denim vendor reporting losing out on a significant payment after a client insisted on a payment term extension then went bankrupt before delivering funds.
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How The Pandemic Drives Demand For Faster B2B Invoice, Payment Delivery
Sending paper checks and invoices is inconvenient for companies with employees working from home and many are now adopting digital payment tools to help them deliver funds on time, said Kim Vodicka, vice president of commercial operations at Dell Financial Services. In the Feature Story, she explained how buyers are modernizing AP processes for faster payments and how sellers are answering with quicker, more streamlined ways of delivering invoicing information.
Find the story in the Report.
Deep Dive: How Businesses Accelerate Payments Via APIs And Webhooks
Companies are putting an emphasis on receiving payments in real-time as they cope with the challenges caused by the pandemic. Firms may have difficulties adopting real-time payments, however, due to the costs involved in upgrading their existing systems and struggles to manage security. The Deep Dive examines how technologies like application programming interfaces (APIs) and webhooks can help firms and their banks overcome these hurdles.
Get the full Deep Dive in the Report.
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