We’re at the crossroads of understanding how customer demands are changing with time and how businesses are continuously working to meet those demands with the unpredictable economy. This e-book aims to help finance leaders across mid-sized businesses understand how digital accounts receivable (AR) payments can bring value to their business with improved operational efficiency.
Cash plays a crucial role in the survival of any business and the ongoing global crisis has prompted businesses to re-evaluate their payment processes to deal with cash flow issues. Late payments coupled with delayed processing for traditional methods of payment such as cash and checks add on to the struggle of preserving cash. For many mid-sized businesses, paper-checks are still relevant but it comes with a steep price to pay. The primary concern is the manual processing time as they take a long time to reflect on the open AR on top of being error and fraud-prone.
Digital payment methods have emerged to address these pain points by streamlining payment processing with added benefits such as real-time payment, better visibility, compliance, fraud protection, and improved cash flow.
When it comes down to the question of survival, cash flow is oxygen for businesses. Having better visibility and getting paid faster with lower transaction fees are critical for finance executives. Real-time payment methods can accelerate cash flow while avoiding the high cost of manually processing traditional paper-based checks. Owing to digitalized payment methods, a faster payment cycle would result in positive cash flow.
This e-book outlines the changing dynamics in the B2B accounts receivable (AR) payments landscape within mid-sized businesses. Understand the challenges involved in traditional payment methods and how it affects the overall cash flow. Explore key market trends and emerging digital payment methods that provide opportunities to improve cash flow and make a positive impact on working capital.
Traditionally, invoices, receipts, and disbursements were all manually paid and processed either through cash or checks. These payment methods resulted in an increasing rate of financial complexity, delays, and risk. Fast forward to the present, digitalization has proven to be a key enabler to change the entire landscape of payments.
While traditional paper check-based payment systems continue to drive the majority of the cash management cycle, there’s an ongoing worldwide reform to switch to real-time payments. Let’s go over the basic payment systems in place and understand the necessity of improving efficiency with reduced operational risks.
According to Mastercard, the financial sector within the B2B space stands at a range of USD 25 trillion, annually.
Furthermore, according to the National Middle Market Summit, up to 55% of businesses face challenging issues in terms of maintaining a balanced working capital. With opportunities in obtaining valuable information through payments, mid-sized B2B companies can leverage digitally produced insights to address complex problems such as handling the processing of consumer payments while managing regulatory, compliance, and cost-based challenges.
Let’s go over some of the trends that continue to redefine the entire payment landscape.
In order to stay ahead of the curve, it’s important to recognize and address multiple issues in terms of operation and delivery service of payments. Conventional business payment structures continue to face vexing challenges in terms of increased high levels of usability, flexibility, and responsiveness in transactions. Here are some of the challenges faced by businesses –
With poor authorization controls for B2B transactions, the risk of fraud is very high. Some of the top risk segments include check-forgery and cyber fraud. As per reports by the American Bankers Association, 60% of attempted fraud is check related fraud. Businesses following a paper-based manual process are much more likely to be exposed to these risks involved in B2B payments.
With disparate payment methods and processing challenges, there is a lack of visibility into additional costs, error-prone delays, and chargebacks in individual accounts. Furthermore, companies are not able to take care of payment disputes as it is impossible to get a clear picture of finances.
In order to have a competitive advantage, businesses need to accommodate the buyer’s preferred method of payment. The availability of multiple payment formats such as Same-day ACH, Virtual Cards, and Wire makes it possible for businesses to get real-time payments.
Digital payments are not just limited to cards and payment portals, businesses are now taking advantage of Remote Deposits for check payments. Customers can conveniently make remote check deposits using a mobile device. On the customer side, this saves a lot of time, money, and effort of having to go to banks for making a physical deposit. The adaptability of these payment formats helps in taking better cash management and working capital decisions.
With the availability of payment portals, customers can choose to pay for individual or multiple invoices at the same time. As particular invoices are already accounted for in this method, businesses can focus on higher-value tasks instead of manually reconciling individual payments with remittance and invoice information. This removes the risk of human error and provides better control of finances.
The availability of multiple payment formats makes it easier for customers to pay for invoices on time. This will result in a reduction in the overhead of the open AR.
In the B2B payments space, adapting to the changing needs of the business and customers will have a ripple effect going forward. Businesses must determine where they stand in their digital payment journey. Mid-sized business owners can benefit from this digital transformation with faster payments, better customer experience, and improved operational efficiency leading to positive cash flow. The first step is to determine the overall cost and benefits of different payment methods that specifically cater to their business goals.
HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company that leverages Artificial Intelligence-based Autonomous Systems to help 600+ industry-leading companies automate their Accounts Receivable and Treasury processes.
Processing over $4.7 Trillion in receivable transactions annually, HighRadius solutions have a proven track record of optimizing cash flow, reducing days sales outstanding (DSO) and bad debt, and increasing operational efficiency so that companies may achieve strong ROI in just a few months.
HighRadius is the industry’s most preferred solution for Accounts Receivable & Treasury and has been named a Leader by IDC MarketScape twice in a row.
The RadiusOne AR Suite by HighRadius is a complete accounts receivable solution built for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. With out-of-the-box integration, the solution can be deployed in under four weeks without borrowing support and time from internal IT teams. It supports robust API-based connectors for lightning-fast remote deployment.
With flexible integration support for popular ERPs such as Oracle NetSuite, Sage Intacct, Microsoft Dynamics, SAP, and many more; the solution aims at streamlining AR processes while eliminating hours of manual and paper-based workload, enabling improved visibility, control, and efficiency.
For more information, visit www.highradius.com
HighRadius RadiusOne AR Suite provides the complete eInvoicing solution designed to automate your invoice delivery and empower customers with a self-service portal to manage, track and pay invoices. It is quick to deploy and ready to integrate with ERPs like Oracle NetSuite, Sage Intacct, Quickbooks, and scales to meet the needs of your order-to-cash process.
Lightning-fast Remote Deployment | Minimal IT Dependency
Prepackaged Modules with Industry-Specific Best Practices.