A Tough Economic Landscape Calls for Focus on Accounts Receivable
19 June 2023In the midst of a challenging economic climate (and a slow sales year in B2B manufacturing and distribution), the importance of efficient cash flow management cannot be overstated.
And prioritizing your Accounts Receivables (A/R) process can be key to making it possible.
While check and cash payments used to make up the majority of B2B transaction value, they now represent only 32% of those transactions: carving out an opening to help businesses digitize and capture revenue across multiple payment types.
For many, the urgency is building. And the time is now.
In this article, we will cover:
The Importance of Efficient Cash Flow Management for B2B Businesses
The harsh reality we face today is that the B2B sector is a crucial component of the economy, but outdated manual payments systems are holding it back.
Estimating an annual growth rate of 10%, U.S. B2B e-commerce will generate over three billion U.S. dollars sales by 2027 — or it should, as long as B2B organizations can navigate how best to efficiently and effectively get paid.
Here are some of the hurdles to look out for:
Outdated Manual Payment Systems Stifle Cash Flow and Hinder Growth
On an average, it takes 10 days for any business to process a single invoice, which can delay receiving payment up to 30 days or more. The finance teams often struggle with remittance, map checks, manual processes, and so on. Automating and digitizing just this single process can help get you paid faster and sooner.
A/R Teams Need Support, More Resources, and Better Tools
Accounts Receivable (AR) management is a crucial aspect of operating a successful omnichannel business. However, hiring and training an Accounts Receivable team can be a lengthy and costly process. When businesses are grappling with the unpredictable economic climate, it becomes challenging for them to invest substantial sums into improving their processes. That said, cash flow management is critical for the survival and growth of any business.
B2B Finance is More Complex Than B2C — and Requires a Tailored Approach
Larger orders, deeper customer relationships, various terms of payment, etc. making a digital overhaul that much more difficult for B2B businesses. Integrated payment systems take the complexity out of those time-consuming and cumbersome tasks and create a simplified, automated payment process, easing the workload for businesses. However, it is crucial to identify the right payment solution that resonates with your business needs, while custom and scalable integrated payment solutions are ideal, they can be costly and beyond the reach of many businesses. This presents a major challenge for businesses that are looking to improve their payment processing.
Streamlining Payment Processing Means You’re Free to Focus on Business Growth
Since maintaining a large AR team to manage cash flow is no longer feasible and custom-developed solutions can be cost-prohibitive, businesses need a solution that is user-friendly, secure, integrated with their existing Enterprise Resource Planning (ERP) system, and reasonably priced. The solution must also be able to provide immediate actionable results, without the need for downtime for setup.
Leveraging Integrated Payment Solutions for Cost Efficiency and Actionable Results
Fortunately, there are solutions available in the market that start from as little as $45/month, offering seamless integration, user-friendliness, security, and quick deployment. While they may not be as comprehensive as custom-built payment solutions, they can automate costly AR manual processes, lower merchant account fees, shorten account reconciliation time, gain operational efficiency, and enhance customer experience, with –
- Automation through ERP integration – The real-time communication between your payment solution and your ERP ensures speed and accuracy on every transaction with amounts and their journal entries are all automatically taken care of.
- 24/7 payments – Empowering your customers with the freedom to pay their bills online 24/7 using the payment portal without any support needed from your end.
- Versatile payment methods – Enabling you to accept all major credit cards, ACH/EFT, credit memos, even general payment unassociated to an invoice.
- PCI secure – With all transactions processed in PCI Level 1 Certified private cloud environment and use AVS/CV2 validation to ensure the security of your customers’ cardholder data.
- Access to detailed reports – Offering data at your fingertips, including access electronic transaction reports
Getting Prepared for the Future of B2B Payments? Here Are Our Tips.
Businesses that hope to be prepared for the future of B2B buying, selling, and payments should look for such solutions that have already incorporated the necessary capabilities, and are easy to integrate into their existing ERP systems. An integrated payment solution is an essential tool for any omnichannel business, and businesses should leverage solutions that can provide immediate actionable results and cost efficiency without the need for downtime for set up. Choosing the right solution can allow businesses to streamline their payment processing and manage their cash flow effectively, enabling them to focus on growing their business.
That’s k-ecommerce.
Explore how we help you tackle the most common A/R challenges in B2B.