Boyce Adams May 23, 2022 Acquiring, Competitive Strategies, Credit Cards, Fraud & Security, Transaction Processing

Using services like Zelle, Cash App, Venmo, and PayPal is a no-brainer when it comes to making payments in our personal lives. In fact, 94% of Millennials, 88% of Gen Xers, and 87% of Gen Zers are using payment apps in place of cash and credit cards. Now there’s a ripe opportunity for companies to bring that same level of convenience and speed to business-to-business (B2B) transactions. 

Financial technology can help do this by evolving simple, on-premise accounting systems to cloud-based, dynamic solutions that leverage artificial intelligence (AI) and machine learning (ML) to transform financial processes and provide a modern payments feel. 

Contrary to what some may think, there’s no need to fully overhaul accounting departments to evolve B2B payments. Many automated billing and invoicing software solutions and electronic payment systems integrate with existing accounting software, providing customers, suppliers, and vendors the superior payments experience they’ve come to expect outside of work. 

For instance, rather than waiting for an invoice to be collected from a mailroom, shuffled through approvals, and ultimately paid by slow-moving paper checks that are at the mercy of the postal service, a supplier can electronically submit an invoice, have it processed within minutes versus days, and select its choice of payment method, including quick and secure electronic payments. 

Furthermore, payments can be one-time, recurring, or automatic. And many leverage Straight Through Processing (STP), which allows funds to travel directly from approval to a merchant’s account on electronic systems, mimicking the convenience of peer-to-peer payment apps. 

Payees aren’t the only ones to benefit from modernized payments. By automating payments and offering alternatives to paper checks, organizations remove costly, time-intensive, error-prone manual tasks, replacing them with faster, more efficient, and accurate processes. This switch enables them to spend more time growing the business versus feeling stressed about getting their suppliers paid accurately and on-time.

Let’s take a look at some of the key benefits businesses gain by embracing a modernized payment experience for their suppliers, customers and vendors.

Greater efficiency, allowing accounting teams to do more with less

Removing paper significantly reduces the time back-office staff spends processing invoices. There are no more wasted efforts signing, stuffing, stamping, and sending stacks of paper checks to pay vendors. Instead, staff can review invoices, code them, and approve payments with a few clicks, similar to the way they review the tab at their favorite restaurant and click a payment app on their phone to reimburse their dinner companion for their portion of the meal. 

The time saved can then be spent taking on bigger workloads and more strategic initiatives, like strengthening supplier relationships or identifying new opportunities to help their employer grow.

Popular P2P (person to person) apps ensure accuracy and security using payment-security methods like facial recognition and fingerprint scanners, as well as two-factor authentication.

Automated invoicing software, by its nature, reduces errors by removing the need for manual tasks. It also ensures accuracy by leveraging a three-way process to match a purchase order, invoice, and goods receipt to validate a supplier’s invoice before payment is submitted.

Purchase-order software can also reduce errors and oversights by determining purchase patterns and inefficient spend to eliminate multiple purchases for similar products. 

According to a report from the Association of Financial Professionals, 74% percent of organizations were targets of an attempted or actual fraud attack last year. 

That’s an alarming rate for businesses, as both their finances and reputation are at stake. Modernizing payments offers protection by providing safer alternatives to that riskiest form of payment, paper checks. E-payment options include Automated Clearing House (ACH) payments, virtual credit cards (VCCs), and direct deposit. 

Automated accounting solutions also protect companies by offering built-in internal controls and visibility into the status of payments and invoices. This functionality can help make it easier to spot discrepancies or inconsistencies that could be red flags.

A modern system that replicates the consumer payments experience

The vast majority of consumers is now completely accustomed to paying for purchases through e-payments and payment platforms rather than relying on cash and check. As paper checks, once the standard payment method for businesses, continue to fall from favor, businesses have an opportunity to update their payment processes to provide their customers and suppliers the superior payment experience they expect in their personal lives. 

Businesses that are ready to evolve to meet these rising expectations can invest in automated invoicing and payment solutions that remove the slow, manual processes involved in paying their bills and offer fast, convenient, and secure e-payment methods. Moreover, some solutions integrate with existing technology so back-office staff can quickly deliver a better payment experience for their customers without disrupting their workflows. 

In short, vendors will thank companies using automated systems for speedier payments and greater convenience, and businesses can reap the benefits of modernization, including enhanced visibility, efficiency, and tighter security. 

—Boyce Adams is senior vice president of growth, AvidXchange.

Payments players have suspected for the past two years that digital payments were becoming increasingly …

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