Whether you want to believe it or not, the future of B2B receivables will be automated. Gone are the days of the manual, time-consuming process – especially in accounts receivable (AR). Organizations are getting smarter and more efficient when it comes to fully utilizing the resources available to them and maximizing the human capital manpower they have at their disposal. This is even more true when it comes to streamlining the payments process and minimizing company days sales outstanding (DSO).
But like all great trends, this shift into the world of automation and digitized solutions is one that takes time. The implementation process in larger and for older companies is a time consuming one. Not only does every facet of the organization have to be synced and aligned with a new process for accepting payments, but employees need to adopt and embrace it. Yet as more solutions (solutions that specifically automate and streamline the world of payments in B2B) come out of the woodwork, there are less reasons to turn a blind eye and ignore the evolution of how the world is choosing to do business.
In the third installment of the On the Lookout series, we’re going to take a deeper look at where the world of payments is headed and what a truly and fully digitized payments space really looks like. Let’s jump right in!
Inching Closer to Complete Digitization
The global B2B payments market is estimated at more than $38 trillion, yet it is still dominated by paper checks. But digital B2B payments are closer in reach than ever before. As 2019 progresses, more companies are going to convert to digital payments, one way or another.
Some key areas we were watching in 2018 included the growth of mobile transactions. According to Deloitte, the U.S. B2B payment market is growing at a 5.8% compound annual growth rate. Mobile has been a long trend in the B2C world, and its convenience is finally starting to catch on for B2B payments.
Industries such as transportation or food supply, where a driver might be in a position to accept an order and payment outside of a customer’s usual standing order, would benefit from the autonomy that a mobile solution provides. In this instance, the driver could accept the order and payment immediately. Companies will begin to roll out more mobile-friendly websites and payment portals for their customers, giving them even more flexibility and automation in the process.
Real time payments is another trend gaining more momentum in the payments space. Same day ACH may not be so cutting edge these days, but immediate or real-time payments systems and infrastructures are being planned or rolled out in more and more countries. With customers increasingly requiring ease, speed, convenience, security and always-on processing for their payments, the global momentum behind immediate payments is unstoppable. That’s driving more disruption and innovation in the industry.
However, the biggest trend of 2019 as far as digitization goes is that we’re going to see B2B payments start to follow the path of peer-to-peer payments, and this starts with speed and reliability. When thinking about the future of B2B payments, more than half (54%) of respondents believe payment reliability needs the most improvement. Additionally, 68% of A/P professionals said speed of payment is most important to their suppliers. Businesses need to be paid on time to keep running, and they need to know whatever system they use is going to deliver as quickly as possible.
While we don’t yet have Venmo for B2B, 2019 will see faster options with less roadblocks. Those in the payments space know that there are more complexities to transactions between businesses, such as the large amounts of money being transferred and the differences between buyer and supplier payment systems. However, customer expectations are changing, and people want to see B2B payments solutions that provide the instant, easy payments that their digital P2P counterparts have achieved.
Check Back Next Week!
We hope that this third installment of the On the Lookout series has given you a better perspective on the reality of the digitized payments world to come and where companies like Billtrust fit into such a place. Make sure to catch us again for next week’s final article of On the Lookout, where we’ll cover the union of the worlds of Fintech and banks and what that means for the world of business tomorrow. See you then!