Your buyers have reasons to rejoice
Adoption of both accounts payable software and 3rd party AP providers is increasing – and they’re making paying bills both easier and a source of revenue generation for buyers. But suppliers are getting squeezed.
AP providers issue credit cards to buyers and offer rebates on payments, then they pressure suppliers to accept them. The high interchange fees associated with cards increase the cost of acceptance for suppliers. The payments themselves take 5.5 minutes to apply on average and AP providers frequently contact suppliers attempting to gain acceptance of their card payments. Suppliers must retain adequate staff to handle these contacts.
With Gartner predicting that, by 2025, 50% of buyers will use AP providers to handle their payments and Accenture projecting that B2B card spend will be $355 billion by 2022 (2), suppliers are facing a major challenge in the coming decade.
But advanced accounts receivable practices can optimize the benefits of card (quicker invoice-to-cash time) and rebalance payments agency in favor of suppliers.
- Negotiating with financial institutions at the onset of the card onboarding process can help get supplier payment preferences honored.
- Calculating the cost of acceptance of all payment channels can help suppliers be more strategic in setting their payment preferences.
- A customer segmentation strategy allows suppliers to better meet each buyer’s needs and nurture unique business relationships.
These smart AR practices can be best achieved by utilizing accounts receivable automation and supplier-driven payments solutions.
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