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Next-Gen Automation Helps B2B Payments Cross Borders By Easing Frictions

Back in 1785, a fellow by the name of Evans invented the first fully automated industrial process — a water-powered flour mill. Automation’s long march to the present day finds automation grinding out new solutions to cash management issues during a topsy-turvy economic time.

Among other topics extensively reported, PYMNTS’ latest Global B2B Payments Playbook, done in collaboration with Worldpay B2B Payments, zeroes in on international B2B payments friction, and how digital invoicing and payments are making it easier for B2B funds to cross borders.

“Recent PYMNTS research found that 64 percent of B2B firms are moving away from physical invoices, for example, while other reports show that technologies for helping companies better categorize and store data — such as tools for automation — are also seeing greater interest among businesses,” per the new Playbook.

Adding that “firms are beginning to evaluate how their B2B payments processes can accommodate their changing needs as well as those of their clients,” the Playbook points out what should by now be obvious: “Many can no longer shoulder the time-consuming and costly frictions that accompany more traditional B2B payment methods such as wire transfers.”

Cash Management Moving in Virtual Directions

Since we can’t really define the current time period as “post-pandemic” with any confidence, corporates continue optimizing back-office systems by layering on nimble FinTech tools, seeking true end-to-end accounting configured for the changeable payments terrain of 2021.

Noting that “virtual cards are garnering more interest from businesses [and] could eventually become a dominant B2B payment method,” the new Global B2B Payments Playbook points to meaningful modernization now ramping up in the accounts payable (AP) and accounts receivable (AR) space as a logical next step in the evolution of financial automation.

According to the Playbook, automation and artificial intelligence (AI) “can accelerate domestic and cross-border B2B payment processes by reducing the time and resources required to finalize attached documents and categorize relevant payments data. Incorporating some degree of automation into their accounts payable (AP) and accounts receivable (AR) processes can help businesses add transparency for merchants as well, allowing the latter to better monitor their cash flows.”

Researchers found that 65 percent and 54 percent of small and large firms, respectively, see manual payments as error-laden and time-draining. Automation addresses these issues.

B2B, Consumer Payments Experiences Merging

With expectations around business payments being influenced by consumer-centric peer-to-peer (P2P) payments and related innovations, the Global B2B Payments Playbook states that “an … important aspect of building a competitive business is being able to send cross-border payments just as swiftly as domestic ones. Tapping a global third-party payment provider could help firms effectively circumvent this challenge.”

“Delayed payments are causing frustration among businesses during the pandemic,” per the Playbook. “Payment players are thus examining ways to modernize the AP and the AR processes attached to B2B cash management,” an impediment that becomes more arduous when dealing in international currencies and an ever-stricter global regulatory climate.

As the Playbook notes, “a new report found that order entry errors alone can harm firms’ profitability, with 74 percent of manufacturers and 81 percent of distributors saying that these issues can decrease their profitability by up to 25 percent. It also reported that manual data-entry mistakes occur daily for 7 percent of B2B companies.”

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