It has been a long time since companies could dominate their space in only one region. As industries continue to expand, consolidate, and get more competitive, it’s imperative for companies to seek new and emerging markets in order to survive.
Fueled by technological advancements that make it easier to access untapped and emerging markets, cross-border transactions have become increasingly more common. While companies benefit from the increased brand awareness, new sales, and increased market share, doing business on a global scale presents a challenging logistical nightmare for accounts receivable (AR) teams, arguably the backbone of any organization.
Why Are Cross-Border Payments So Hard?
Doing business is complex.
Even on a good day, managing the corporate AR and AP processes can be challenging. But doing international business adds another layer of complexity with having to transact across time zones, fluctuating currencies, and multiple languages.
One of the top five takeaways from the fifth Billtrust Summit, Billtrust’s annual customer event, was the growing need to address international receivables and payments with smarter and better technology.
Although international commerce offers incredible growth opportunities, expansion also carries major risks to the financial health of the organization. Let’s further explore how accounts receivable (AR) teams can identify the risks and help mitigate them by offering solutions back to their business.
Accounts payable (AP) systems are also driving new payment behavior, which creates a whole new host of AR challenges which need to catch up with these technology and automation trends. And even more than AP automation, B2B customers don’t think their experiences with other businesses match their experience with consumer companies. As the “consumerization” of B2B continues, pressure will grow on leaders to accelerate their digitization efforts, which can have a direct and immediate impact on a company’s cash flow, operational efficiency and reduction in days sales outstanding.
Cash Flow & Application
One of the major risks of international commerce is slow cross-border payments and reconciliation, leading to a decrease in cash flow. Adding transparency and speed to the process can solve important cash flow issues that normally strain businesses and impede their growth. Organizations can further reduce their DSO by automating the reconciliation process with technology that processes payments while keeping the payment and remittance information together, unlike common international payment methods like wire transfers that decouple this information.
Hidden Fees & Costs
Because of the complexity surrounding international invoicing and payments, AR teams often must resort to manual, costly, and time-consuming processes in order to reconcile remittance information and apply cash back to the business. As a result, there is a lack of transparency for both the biller and the payor when it comes to hidden fees, exchange rates, and taxes.
Further, dispute resolution, short payments, manual errors, and the lack of transparency all increase operational costs and affect customer satisfaction.
Your Competition’s Ability to Win Market Share
Companies without established and preferred banking relationships or infrastructure in specific regions have extra difficulty receiving payments in those markets. AR teams can partner with invoicing and payment software providers that offer a comprehensive network of global and regional banking relationships, letting you focus on growing your business.
Data Security & Regulatory Compliance
The risk of data breaches, hacks, and personal information theft seems to increase every day, and international commerce’s manual processes are the most vulnerable. Data security, compliance, and privacy are top priorities for Billtrust, and our enterprise cloud services are independently validated through third-party audits, continual self-assessment, and legal oversight.
International trade and commerce also has critical compliance obligations when it comes to anti-money laundering (AML), know-your-customer (KYC), and sanctions screening considerations depending on the region. Because of this, it is critical that international payment processors are committed and up-to-date on regulatory obligations and expectations.
The Future of Receiving International Payments
Without the right processes and technology in place, organizations can soon be crushed under the weight of accepting cross-border and international payments. Solution providers like Billtrust recognize this growing need, and AR teams can and should expect technology to help address these issues by making receiving cross-border payments more efficient and cost-effective.
At the Billtrust Summit, CEO Flint Lane laid out a roadmap to make international invoicing and payments easier for our customers. We’ll be partnering with experts in this space to offer solutions that will greatly reduce or eliminate bank transfer and wire fees, manual reconciliation, and support over 150 currencies.
But wait, there’s more! Payors will benefit by being able to receive invoices in languages and formats that are familiar to them, receive full transparency around fees and exchange rates, and have peace of mind knowing their information is secure and private.
Stay tuned for more updates and news around how Billtrust will help scale your order-to-cash operations to accelerate your international growth.
Billtrust recently announced its partnership with Flywire, a provider of global payments and receivables solutions, which will streamline the receipt of international payments for Billtrust business customers. The joint offering will help customers more easily collect international payments while lowering the cost of international wire fees and eliminating the manual posting of cross-border payments.