When the pandemic arrived in 2020, consumer brands like DoorDash and Amazon had enough traction to quickly adapt to serve an audience that wanted to avoid in-person shopping.
B2B brands weren’t as lucky, as B2B payments and purchases have lagged behind their consumer counterparts when it comes to automation and speed. The rise of global ventures and cross-border businesses has raised the stakes, leading to a pressing need to modernize B2B payments and streamline associated processes.
When PYMNTS surveyed financial institutions (FIs), we found that the pandemic intensified the friction their B2B clients dealt with when managing invoicing and payments. FIs said their clients reported a number of financial management pain points, such as slow underwriting (15%), general invoice reconciliation (14%) and working capital management processes (11%).
In addition, our research showed that the major pain points for CFOs had to do with the need to improve cash flow management by digitizing their AR and AP systems. To be fair, FIs seem to recognize the need to meet these challenges. And FIs with experience handling transactions in face-to-face or in hybrid interactions know they need to offer business clients top quality mobile- and digital-first payment tools.
But although an increased number of solutions for secure, convenient and simple facilitation tools have entered the space, the chief pain points for B2B transactions have worsened during the last two years.
FIs need to improve their digital transformation efforts to meet the needs of their clients or risk losing out to the smaller and more nimble FinTechs that proliferate every year.
PYMNTS research identified five important digital features FIs could add to their online experience that could ease client pain points: offering supplier portals vital information instantly; improving access and shareability for cash flow data and other critical data in real-time; a simple and integrated AP and AR system; real-time cash flow management; and easier payment integration with legacy systems, including ERP systems.
To find out more about what B2B companies are doing to modernize the digital payments process, download the B2B Digital Payments Tracker, a collaboration between PYMNTS and American Express.
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NEW PYMNTS DATA: THE FUTURE OF BUSINESS PAYABLES INNOVATION STUDY– APRIL 2022
About: While over half of SMBs believe that an all-in-one payment platform can save them time and improve visibility into cash flows, 56% believe that the solution could be difficult to integrate with existing AP and AR systems. The Future Of Business Payables Innovation Report, a PYMNTS and Plastiq collaboration, surveyed 500 SMBs with revenues between $500,000 and $100 million to explore how all-in-one solutions can exceed SMBs’ expectations and help future-proof their businesses.
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