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Putting touchless payments in reach with BPN and Cash Application

B2B payments have never been simple. Decoupled remittances, check payments, tedious cash application have always required manual effort by AR professionals. But manual payment acceptance processes add days to DSO, limit cash flow and reduce working capital. The truth is that the status quo is slow

But until recently, there hasn’t been an alternative.

How to automate your B2B payment acceptance

Business Payments Network (BPN) was launched to tackle one of the largest hurdles in B2B payments today: managing all of the data and reconciliation required to achieve straight-through-processing. BPN automates the payments process by removing friction on both sides of the B2B payments equation. 

For enterprise buyers, BPN provides a directory of suppliers’ digital payment preferences to their AP providers. This allows the AP providers to understand what forms of payment their customers’ suppliers will accept and enables them to initiate payments (once the buyer approves the invoice) without needing to manually enter data like payment preferences, email addresses and remittance information. 

For suppliers, BPN allows them to receive multi-channel digital payments into a digital lockbox without needing to worry about finding uncoupled remittance data. BPN then moves funds into the supplier’s bank and sends remittance data either to the supplier’s ERP for cash application, or to Billtrust’s Cash Application solution.

Why automating digital payments matters

Paper checks are still the dominant form of B2B payment. Buyers often default to check because the only data they need to gather in order to send them is the supplier’s address. But processing paper checks is slower and more costly for suppliers (when considering overhead costs, check fraud, value-added keying and added DSO) then most forms of digital payment. 

And the transformation of business caused by the COVID-19 pandemic has further highlighted the need to adopt efficient digital payment processes. 

Billtrust’s CEO, Flint Lane said it best: “In this new normal of accounts receivable and accounts payable teams initiating and accepting payments from the comfort of their homes, paper checks simply do not fit in this environment.” 

BPN is designed to help businesses grow their percentage of digital payments by automating the movement of remittance data along with funds between buyer and supplier whether payments are made via card, ACH or wire transfer.

How to automate multi-channel digital payments

BPN fully automates the B2B payments process from payment initiation to fund transfer and cash application.

BPN delivers touchless payments with two technologies: The Digital Lockbox and Billtrust Cash Application.

The Digital Lockbox

BPN Digital Lockbox technology automates payment acceptance and remittance data retrieval across all three electronic payment methods: ACH, wire transfer and credit card. 

This is no simple feat. ACH and wire transfer payments are notorious for coming with decoupled or missing remittance data, requiring AR professionals to dig through emails, log into AP portals or reach out to buyers for data.

The BPN Digital Lockbox can automatically extract payments sent via email, file attachment, AP web portal or a supplier-hosted self-serve portal. The Digital Lockbox features a virtual bank account that Billtrust uses to ensure that each remittance in the Digital Lockbox can be tied to every dollar in the supplier’s settlement account. 

The BPN Digital Lockbox allows suppliers who are growing their buyers, but struggling to keep up with all of their payment practices, to continue to grow without needing additional resources. And for suppliers who are trying to do more with less, the BPN Digital Lockbox allows them to stay on top of their payment acceptance, while freeing teammates to work on other vital tasks.

Billtrust Cash Application

Billtrust’s automated cash application solution completes the touchless payment process for the supplier. Once the BPN Digital Lockbox has grabbed a transaction, it will send a consolidated remittance file to the supplier as often as is necessary.

This file can be ingested directly into the supplier’s ERP for cash application. Most ERPs feature some level of automated cash application functionality, but they are not optimized for this task – leading to low match rates and excessive manual exception handling.

Billtrust Cash Application is a specialized solution that works directly with the remittance and invoice data in the supplier’s ERP. Its predictive, automated matching engine delivers market-leading match rates at the envelope and item level – with nearly 100% accuracy. 
With BPN Digital Lockbox and Billtrust Cash Application working together, suppliers can finally achieve touchless, straight-thru-processing on nearly all of their digital payments.

Billtrust Cash Application is also a great solution for the payments that suppliers are still receiving via paper check. Check capture via a mobile app or scanner and then digitized using Optical Character Recognition (OCR) technology takes most of the manual work and expense out of processing paper checks. It also allows companies to accept check payments without needing to access a check scanner at a physical office location.

How BPN lowers the cost of credit card acceptance

BPN helps suppliers lower their costs of card acceptance by reducing labor and by helping them to cut their credit card processing fees.

The automation of payment processing reduces labor requirements by eliminating the need to key in payment and remittance data transmitted over the phone or by email. It also addresses PCI compliance by enabling secure storage of payment details.

Credit card processing fees are reduced by processing payments with Level 2 or Level 3 data – something that many suppliers struggle to achieve on their own – which leads to lower fees.

Level 2 and Level 3 transactions contain many more points of data than Level 1 transactions. Card processors consider transactions that come with more data to be more secure and less likely to be fraudulent or in error, so they reward Level 2 and Level 3 transactions with lower fees. Suppliers can realize reductions in their credit card fees up to 1%.

How BPN integrates with AP providers

The growing trend of AP provider adoption among buyers is undeniable, and it’s causing numerous challenges for AR teams. But AR automation can help suppliers optimize their relationships with their customers’ AP providers. 

Billtrust Invoicing offers suppliers AP portal automation technology which eliminates the need for them to log into each of their customers’ AP portals and key in invoice data manually. 

And BPN enables suppliers to automate acceptance of payments from AP provider portals, whether those payments are via credit card, ACH or wire transfer. The BPN Digital Lockbox retrieves the funds and remittance data and transfers it to the supplier’s bank and ERP automatically.

Creating a new status quo for B2B payments

The B2B payments landscape will continue to evolve and there may always be a mix of various digital and paper payment channels. But the power of automation grants AR professionals the ability to rationalize an irrational payments ecosystem. 

With BPN, suppliers and their AR teams can save time and money on their payment acceptance processes. They can better honor their customers’ payment preferences. And they can reduce their DSO and increase cash flow.

BPN has put truly touchless B2B payments in reach. If you’d like to learn more about how your company can benefit from BPN, please reach out to [email protected].

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