Integrated Payables: The 2021 Game-Changer for B2B Payment Automation
Imagine a forklift arriving to install a check-writing machine in your garage so you can pay suppliers, keeping your supply chain open and your company in business.
Imagine being the banker who couldn’t offer this corporate customer an easier, better solution.
This is not fiction. As the pandemic abruptly disrupted the workplace, far too many financial institutions and corporate finance departments regretted having delayed full payment automation. If that sounds familiar, you’re not alone. Middle market companies, on average, still pay two-thirds of their suppliers by check.
Many hold onto the idea that B2B payments are too complex for full automation. They are running very lean teams and legacy technology which means they need a solution that takes the heavy-lifting of integration and supplier enrollment off their backs.
The good news for 2021 is that banks and fintechs have been driving innovation to deliver Integrated Payables (IP) solutions for middle market companies. A truly integrated payment platform enables corporate accounting teams to make seamless, automated payments to their suppliers – while gaining rich invoice and purchase order data.
To accelerate integrated payments adoption, let’s knock down the four most common roadblock bankers and corporate finance teams encounter when seeking change.
- Aren’t B2B payments too complicated to automate? We recognize that commercial buyers and suppliers need greater flexibility in payment types and terms, seamless integration and rich data. With the right IP solution, the rich data shared between buyer and supplier – invoice number, payment amount, purchase orders details, and more – can be easily imported into both ERP systems instead of manually entering data.
Buyers should be able to upload one simple payment instruction file and have all payment options executed through that one file. A truly integrated payment reduces complexity.
- How can Integrated Payables make life better for buyers and suppliers? There is a strong business case for delivering value to both buyers and suppliers. Typically, an AP solution consists of issuing virtual cards. However, most solutions don’t factor in any other payable methods that drive additional value, like buyer-initiated payments (BIP), ACH+ and dynamic discounting, along with simple ACH and check.
These payment types offer opportunities to not only streamline — but monetize — a buyer’s AP through a revenue share with the fintech and their end-user customers. Life is better when the IP solution makes it very simple to monetize accounts payable with little to no investment of time, money or technology resources on the buyer’s part.
- Are suppliers really willing to get paid like this? Suppliers are strapped for cash and need to be paid as quickly as possible. Many suppliers today are willing to receive payment quicker from their strategic clients for a small fee. The right payment strategy allows the supplier to be paid sooner with good funds, while the buyer receives a rebate.
For those who want to stay with check and simple ACH, an IP platform can still improve the level of security and data delivered for both buyer and supplier using these methods.
- How can B2B payments bridge the divide and eliminate checks? Fintechs are partnering with banks to deepen the value proposition to tech-savvy CFOs. Many have seen AP automation solutions streamlining invoice workflow within ERP systems. But, with typical AP automation, the payments piece is missing. These solutions fail to go the “last mile” to deliver payments and rich transaction data.
The game-changer is the IP solution that works with any ERP and accepts a single payment instruction file to allow numerous forms of payments to flow seamlessly to suppliers. When the platform also includes best-in-class supplier enablement and activation, the solution moves the needle to lower cost and generate new revenue in the form of rebates.
Read about the 360-degree solutions that a panel of experts discussed at the CPI Middle Market Summit. Then check out our short video about Priority CPX (Commercial Payments Exchange), recognized by CFO Tech Outlook as a Top 10 AP Solution.
Contact us to discuss working together to make B2B buyer and supplier experience better and everyone’s life simpler in 2021. And, we’ll tell you the happy ending to that forklift story.