How to Automate B2B Payments

Jul 6, 2021 by Daniella Bourguetts

Progressive companies have been investing in Accounts Receivables automation to achieve sustainable growth and optimize their team's most valuable resource: time. As advanced as some ERPs are, they don't automate many of AR's manual processes associated with payments like reconciliation, mailing invoices, and processing paper check payments. Automating these manual and arduous tasks allows an AR team to focus on more impactful and strategic issues that add greater value to the organization.

In 2019, a study conducted by Mastercard and PYMTS titled "B2B Payment Automation Innovation Playbook" stated that 74% of companies haven't yet adopted payment automation but plan to do so by 2022. In a more recent 2021 study, these numbers increased to 76% of respondents wanted to automate banking activities and 80% of respondents planned to automate their payments and reconciliation processes.

Though payment automation has been focused on cost-saving and efficiency, the pandemic has highlighted the need to manage their AR processes remotely plus build a scalable payment process that facilitates the evolution from legacy (paper checks, cash, etc) to digital payments.

In this blog, we will demonstrate how evolving your payment strategy with B2B payments automation can be the key ingredient for growth and embracing the benefits of digital payments. After all, it took a relatively short time for consumers to adopt digital payment apps like Paypal and Venmo. We can be confident that the business payment evolution won't be far behind the consumer's shift away from paper payments.

How automation puts your finance team on path to success

At Paystand, we sometimes hear from companies hesitant to change to an automated payment system. It's difficult to change when some people have used the same processes for many years that have "worked". Thankfully with some coaching these same people understand that change is inevitable and companies either evolve or else.

While new payment technologies aren't revolutionary, using paper checks and credit cards and their associated fees can and will consume resources for those unwilling to change. Those companies who continue to resist the shift toward digital payments will be at the mercy of card networks and their tendencies to increasingly raise processing fees.

Besides the cost and efficiency savings involved in this new digital payment paradigm, there's the benefit of quickly accessing all AR data in one integrated system plus there's no more waiting for the post office to deliver the mail or in the rare case, tracking down a lost envelope.

In summary, the benefits of B2B payment automation are:

  • Lower costs: Save your team time spent on day-to-day manual activities allowing them to focus on more strategic initiatives and eliminate credit card payment processing fees. Paystand, for example, operates under a Payments-as-a-Service model that offers a fixed monthly rate rather a "per transaction" cost so as your business scales, your processing fees remain constant.
  • Increased flexibility: Most automated B2B payment solutions offer the flexibility to manage traditional payment methods (such as credit cards, paper checks or ACH) plus manage new payment rails like Paystand's Bank-to-Bank network. This flexibility guarantees your customers will find their preferred transaction method regardless if they use paper payments or more efficient digital payments.
  • Greater visibility: Payment automation solutions integrate with your ERP providing a centralized location of all AR records and processes.
  • Get your money sooner: Automated payment solutions cut down payment processing times from days to seconds resulting in a lower DSO.
What more can your merchants expect from an automated payment experience

AR teams will negate the need for taking phone calls to process payments, address errors caused by manual processes and process disputes.

Customers can access their invoices and payments outside traditional business hours by paying online, accessing their payment history, and generating reports from their payer dashboard at their convenience.

In summary, Payments-as-a-Service drives improves your company's financial health

A truly automated payment service removes many of AR's arduous manual processes, eliminates credit card fees, speeds up the company's cash cycle, and provides the foundation for helping your customers shift from paper invoices and checks to the more efficient, and soon to be, more prominent method of using digital payments.

Learn more about Paystand's B2B payment automation system here.