HOW B2B EXPORTERS OVERCOME CROSS-BORDER ......in one survey reported some manuusing - al methods to prepare invoices and billing details, but automation can reduce the prob-ability

// 08 //F E AT U R E S TO R Y

Fifty-one percent of small businesses convince clients to adopt digital payments during the pandemic

// 11 //N E W S & T R E N D S

How eSignatures, digital payments and invoicing automation tools streamline B2B payments

// 17 //D E E P D I V E

HOW B2B EXPORTERS OVERCOME CROSS-BORDER AR CHALLENGES

O C T O B E R 2 0 2 0

W H AT ’ S I N S I D E // 04 //A look at how the COVID-19 pandemic is forcing companies to reevaluate using paper-based processes to power their back-office operations and switch to digital AR, AP and purchasing methods

F E AT U R E S TO R Y // 08 //An interview with John Edwards, CEO and founder of Energy Control Systems, on the AR strategies and tools that help businesses receive payments from overseas clients

N E W S & T R E N D S // 11 //Recent business digitization space headlines, including how invoice automation could reduce billing errors and help AR teams get paid faster as well as how SMBs are seeking instant payments to ease their cash flow strains

D E E P D I V E // 17 //An in-depth examination of the back-office modernizations that can streamline AP and AR processes to support smoother business growth

A B O U T // 20 //Information on PYMNTS.com, Coupa and TransferMate

TABLE OFCONTENTS

Acknowledgment The Back-Office Optimization Playbook

is done in collaboration with Coupa and TransferMate, and PYMNTS is grateful for the

companies’ support and insight. PYMNTS.com retains full editorial control over the following

findings, methodology and data analysis.

http://www.pymnts.com/

WHAT’S INSIDE

© 2020 PYMNTS.com All Rights Reserved

4

prone to human error than more automated approaches.

Corporate buyers may also be rethinking how they place and pay for orders. Many are used to connecting with vendors’ sales rep-resentatives by phone or in person to arrange purchases, but the crisis has prompted busi-nesses to reexamine how in-person, manual and paper-based practices may be ill-suited for modern needs. Buyers and vendors alike are examining their transaction methods and internal AP and AR processes, and many are focused on digitizing. Automation and other tools can ultimately accelerate transactions, streamline tasks and reduce billing and pro-cessing errors for businesses that are striving to survive and scale up during the pandemic and beyond.

Around the business digitization space

Vendors are taking fresh looks at their business-to-business (B2B) transactions as the global crisis interrupts cash flows. Small to mid-sized businesses (SMBs) are less able

The COVID-19 pandemic’s widespread dis-ruptions have sent businesses scrambling to control costs and maintain smooth oper-ations. Supply chains, cash flows and sales have all been interrupted, and companies are hustling to respond to shifts and work around new constraints. This is leading some busi-nesses to focus on making their back-office approaches more efficient, which could enable them to reduce costs and be more re-silient in response to sudden shifts in market dynamics or business needs.

Companies’ efforts to revamp their op-erations have revealed just how many of their internal functions still rely on manu-al, paper-based, legacy methods. Numerous vendors’ accounts receivable (AR) teams pre-pare and mail physical invoices to buyers’ accounts payable (AP) departments, which process the invoices by hand before mail-ing back checks. Checks accounted for 30 percent of all supplier payments made in 2019, even though manual and paper-based tasks and payments can be slower and more

https://pv.glenbrook.com/covid-19-will-finally-force-b2b-digital-adoption/


5What’s Inside

than their large counterparts to withstand late payments, and many have been push-ing clients to switch to faster, more reliable methods rather than sending paper checks via postal mail. A new study by Mastercard found that 51 percent of small business re-spondents managed to persuade clients to digitize payments and that many SMBs an-ticipate sticking with these methods in the future.

Companies can also improve their likelihood of promptly receiving compensation by en-suring their invoices are free of mistakes, as such errors can force firms into lengthy discussions with clients to correct the docu-ments. Ninety-four percent of financial teams in one survey reported using some manu-al methods to prepare invoices and billing details, but automation can reduce the prob-ability of mistakes.

Corporate buyers are also revising how they handle procurement, with many moving away from traditional models in which personal contact with sales representatives is part of striking deals. These methods have become more complicated as employees have shifted to working from home and governments con-tinue to mandate social distancing protocols. Many buyers aiming to find items and quickly make purchases are now buying through B2B eCommerce sites, with these marketplac-es projected to handle $3.6 trillion in sales worldwide by 2024.

For more on these stories and other business digitization headlines, read the Playbook’s News and Trends Section (p. 11).

How B2B sellers tackle FX risks and invoicing complexities to reach overseas clients

Selling to international business clients re-quires addressing numerous concerns. Vendors and their business customers may transact in different currencies, for exam-ple, making it important that sellers adopt strategies or tools that can help them han-dle the risk that foreign exchange (FX) rates may change. This is even more critical if business partners’ local currencies are par-ticularly unstable. Suppliers must also be able to manage creating and delivering invoices suited to each client’s home coun-try’s different norms and regulations. In this month’s Feature Story (p. 8), John Edwards, CEO and founder of energy solutions provider Energy Control Systems, details the strate-gic approaches that help his company sell to companies in 43 nations.

Deep Dive: How streamlining and accelerating AR and AP powers business expansions

Business liquidity relies on receiving fast, seamless payments from clients and de-livering smooth payments to suppliers. Paper-based and manual methods can cause delays, however, and the COVID-19 pandem-ic has made using these old-school methods frustrating and even untenable. This month’s Deep Dive (p. 17) examines how compa-nies are working to digitize and streamline their AP and AR operations by using tools such as eSignature solutions, digital invoic-ing and payments- and invoice-processing automation.

https://www.businesswire.com/news/home/20200825005299/en/Mastercard-Study-Shows-COVID-19-Catalyst-Digital-B2Bhttps://www.prweb.com/releases/new_msts_report_finds_cfos_automating_and_outsourcing_back_office_processes_are_better_positioned_for_recovery_and_growth_in_2020/prweb17362552.htmhttps://www.digitalcommerce360.com/2020/08/31/covid-19-drives-more-business-to-b2b-marketplaces/https://www.ecsintl.com/


6

Executive INSIGHTS

“Right now, measurable [return on invest-ment] is the most important item when realizing technology efficiencies and re-engineering business processes. There needs to be a formula and a calculation that can show the return on investment to make the business case self-explanatory. This is more important than ever, and it’s accelerating the need for technology ser-vice solutions that allow for seamless integration in order to save time and mon-ey. It goes beyond just digitizing processes to making them flow with other resourc-es in order to find solutions to payment challenges.”

How is the COVID-19 pandemic accelerating businesses’ needs to digitize their manual, paper-based, back-end systems and improve their B2B payment processes’ efficiencies?

GARY CONROYchief product officer at

TransferMate Global Payments

“Every successful business needs to scale processes in order to grow. From start-up through growth stage and expansion to maturity, digitizing the back office is critical for all companies to maximize ef-ficiency, compliance, and control. Today’s [chief financial officers] realize that they must play an active role in making this happen. Cloud-based platforms that streamline the spend management pro-cess are a great place to start. These platforms help companies efficiently drive resources where they’re truly need-ed and avoid fraud by digitizing reviews and approvals. On the back end, invoice management, payments, reconciliations, working capital and treasury management are all fully automated. Back-office teams are freed up from low-value transaction processing for higher-value work, wheth-er digging in to resolve issues and expand digital processes or supporting strategic analysis and decision-making. [Chief fi-nancial officers] who understand these benefits and partner with IT leaders to make change happen will see rewards in their companies’ [abilities] to scale and grow.”

What are some of the challenges that firms face when improving their back-office efficiencies? Which tools and technologies can help them overcome these roadblocks?

RAJIV RAMACHANDRANsenior vice president of product management

and engineering at Coupa Pay

https://www.transfermate.com/https://www.coupa.com/

Projected value of sales made worldwide via B2B marketplaces by 2024

Share of financial professionals who often have to tap sales teams for help when handling AR tasks

Portion of SMBs that are trying to discourage clients from paying with paper during the pandemic

Share of financial professionals who switched out paper payments for digital ones

Portion of financial managers who wait an average of 45 days to 60 days after a sale to receive payments

$3.6T

78%

64%

39%

33%

FIVEFAST FACTS


7


8

FEATURE STORY


9Feature Story

Businesses need to have smooth, steady in-come flows in today’s volatile economic climate. Swiftly delivering business clients error-free invoices and ensuring that pay-ments are received in a timely manner can be difficult enough for sellers operating with-in national borders. Those difficulties are only compounded when working globally, however.

International B2B sellers must tackle a vari-ety of AR concerns to ensure that business partners from around the world will be able to reliably and easily pay them. One key hur-dle often challenging businesses is the need to specially tailor invoices based on partners’ home countries’ local norms and regula-tions, said John Edwards, CEO and founder of Energy Control Systems (ECS). Corporate sellers must also determine how to handle situations in which they and their clients use different currencies, he explained in a recent PYMNTS interview. ECS sells primarily to over-seas distributors and has had to familiarize itself with these challenges as its operations have grown to reach 43 countries around the globe. Tackling these complications requires careful attention to each markets’ particular-ities and thoughtful strategizing around risk.

Invoicing and risk

Partnering with businesses from around the globe can unlock new opportunities but also pose new challenges. ECS sells mainly in Latin America, Africa and Asia, emailing in-voices that average $5,000 to $7,000 each, and finds that countries vary widely over what details they require to appear on the documents. One-size-fits-all approaches do not work: One country’s regulators might in-sist on seeing delivery addresses while others might need to know the weight of the ship-ment, for example. This makes it essential for businesses like ECS to adopt software tools that can create and store different in-voice templates that can be modified to suit each client.

“[Invoices require everything] from actual sales numbers to weights and [dimension-al weights],” he said. “Sometimes it’s really in-depth specificity on delivery addresses or different packaging requirements on what they need to see in terms of box sizes, [or the] makeup of containers [and] enclosures. … All our shipments need modified invoices.”

Successfully expanding to serve a new country not only entails learning different invoicing requirements but also confronting different levels of risk. ECS has faced chal-lenges in finding international AR solution providers that can support working with cli-ents in countries like Argentina, Nigeria and Venezuela, where solution providers often perceive there to be greater likelihoods of nonpayment or losses due to monetary vola-tility, Edwards said.

How B2B Exporters Overcome Cross-Border AR Challenges

https://www.ecsintl.com/


10Feature Story

This leaves the seller to determine how to manage such risks. ECS has chosen to ap-proach business relationships with greater potential of nonpayment by requiring custom-ers to make partial or full payments upfront rather than waiting for clients to pay 45 to 60 days after receiving invoices. The company maintains this method until enough history has been established between the two par-ties that ECS can trust that the client is likely to keep its end of the bargain if offered net payment terms.

“My biggest risk factor is when do I decide, ‘OK, we’ve got a long enough term history, do I roll the dice [on allowing them to pay later]? And what kind of credit line do I establish for them to be on net payment terms? Do I want to risk losing money?’” Edwards said.

There is no way to be certain a client will come through, but such a strategy helps minimize the chances of such a painful eventuality.

Tackling FX challenges

International sellers also must determine strategies for serving clients that use other currencies. This can be a gamble, and busi-nesses could find themselves in a position in which they have to take on FX risks them-selves and accept that they could lose money should conversion rates change by the time the payments come due. They could instead require clients to handle the conversions and hope that this friction does not turn off too many prospective customers. This is a serious

consideration for Texas-based ECS, which needs to receive funds in U.S. dollars, and the company knows it can be challenging for cli-ents in some countries to get their hands on the currency.

“For [some clients in] Argentina, Brazil [and] several African nations … the ability for them to get [U.S.] dollars to pay is proba-bly the biggest challenge we have right now,” Edwards said.

ECS previously experimented with working with a partner that would accept local cur-rencies from its foreign distributor clients, convert the funds into USD and deliver them to ECS. The intermediary charged clients for the conversion, however, and these fees ultimately proved more painful to distribu-tor clients than any frictions involved when handling currency conversion themselves, Edwards said. ECS has since dropped this approach.

Devising the right cross-border AR approach can be a learning experience that involves some trial and error. Attentiveness to cli-ents’ individual situations and to sellers’ and buyers’ particular needs can help companies minimize that error, however, and guide them in choosing the AR partners and software tools that best support smooth cash flows.


11News & Trends

SMB payment trends51 percent of small businesses have persuaded clients to adopt digital payments

The economic downturn is wreaking havoc on SMBs’ operations, and these firms tend to have fewer financial resources with which to overcome crises. Forty-eight percent of North American SMBs in a recent study said they would likely fold if a client did not pay them on time, for example. Many are thus in-terested in encouraging clients to use digital payment methods rather than slower, phys-ical options like cash or checks. Sixty-four percent of respondents said they are trying to discourage business customers from giv-ing them cash or checks, and 51 percent said they had succeeded in convincing clients to adopt digital payments. Businesses also be-lieve these payment shifts will be long term, with 73 percent saying digital payments would be “the new normal” for their future operations.

How instant settlement could smooth cash flow strains

Most smaller players that are struggling to maintain their cash flows in this strained commercial climate want to avoid waiting for checks to arrive in the mail before they set-tle in their bank accounts. Many are instead seeking transaction methods with same-day settlement times, Lisa McFarland, executive vice president and chief of product at instant push payments platform provider Ingo Money, said during a recent PYMNTS interview. She explained that SMBs’ quest for faster pay-ments is driving them to work with banks that use real-time payment rails or with FinTechs that offer instant transaction capa-bilities via person-to-person (P2P) payment apps. SMBs that use legacy FIs can leverage such tools to supplement the services they receive from their banks — these FIs may have older technology systems that prevent them from adding such features themselves.

NEWS & TRENDS

https://www.businesswire.com/news/home/20200825005299/en/Mastercard-Study-Shows-COVID-19-Catalyst-Digital-B2Bhttps://www.pymnts.com/news/b2b-payments/2020/closing-paper-check-to-instant-cash-flow-gap-for-americas-smbs/


12News & Trends

Accounts receivable developmentsAR tools could help businesses respond to overdue payments problem

All businesses’ AR teams are looking to crack down on late payments, which have long been a problem in the B2B space. One report asserts that 43 percent of the total value of invoices is overdue, a considerable increase from the 25 percent reported last year. The number of invoices that are more than 90 days overdue this year has meanwhile dou-bled to reach 13 percent.

These pains could drive AR teams to adopt automated collection tools that remind cli-ents to pay invoices on time. Such solutions could send clients alerts notifying them that outstanding invoices are at risk of missing their due dates, for example.

94 percent of AR teams manually enter billing or invoice details, report shows

Tools that automate invoice generation and improve billing accuracy could also help businesses get paid sooner. Invoice mistakes often result in payment delays because com-panies must contact clients to sort out issues and using manual processes to generate in-voices introduces human error risks. A new report that surveyed 300 B2B finance profes-sionals in the U.S. found that 94 percent say their financial teams input some billing or in-voice details into their AR systems by hand.

Respondents also frequently need to collab-orate with other departments to help with AR

processes. Seventy-eight percent say their sales teams “very” or “somewhat often” as-sist with collections, credit limit increases, customer onboarding and dispute resolution. Adopting back-office tools that support on-boarding tasks and catch or prevent invoicing errors may reduce the need to tap addition-al workers.

48 percent of financial professionals are accelerating payments or data-handling digitization

A recently released survey that polled finan-cial professionals in July and August found

94% of B2B professionals say their financial teams input some billing or invoice details into their AR systems by hand.

https://finance.yahoo.com/news/frost-sullivan-b2b-businesses-industries-101500116.htmlhttps://www.prweb.com/releases/new_msts_report_finds_cfos_automating_and_outsourcing_back_office_processes_are_better_positioned_for_recovery_and_growth_in_2020/prweb17362552.htmhttps://www.streetinsider.com/Globe+Newswire/Pandemic+Accelerates+Move+to+Digital+for+AP+%26+AR%2C+New+Survey+Shows/17381544.html


13News & Trends

that many companies are struggling with their AR and AP practices and are looking to either outsource or digitize and automate them. Survey respondents appeared especially con-cerned about the pandemic’s disruptions to processes and planning: 48 percent said they are now moving more quickly to digitize payments or information handling. Some re-ported adopting tools like robotic process automation (RPA), which uses software bots to navigate programs and complete tasks that would otherwise demand employees’ atten-tion, and optical character recognition (OCR) tools, which decipher and extract handwrit-ten or typed information from documents. Half of surveyed AR team respondents said they were looking into automation specifi-cally because they wanted to reduce errors, while 68 percent were hoping these new tools would increase efficiency.

eCommerce marketplacesHow the pandemic is driving B2B eCommerce growth

The pandemic has disrupted global supply chains and the ways in which corporate buy-ers traditionally confer with vendors. Buyers could traditionally call sales representatives or visit companies to discuss whether certain items were in stock and then make agree-ments, but this approach has become more difficult as staff members work from home and supply chain volatility increases the im-portance of quick updates about inventory levels. These pains might push companies to engage via B2B eCommerce instead, Suresh

Devanan, CEO and president of digital com-merce platform provider Nish Tech, said in a recent PYMNTS interview. This channel enables business customers to buy more quickly and remotely.

B2B sellers looking to make their first for-ays into the online sales space must decide whether to build their own eCommerce set-ups, which would give them deeper control over user experience, or work with third-party platforms, which would get them up and run-ning faster. Devanan asserted that companies need to move quickly to cope with economic and commercial developments, which could make it difficult for them to roll out need-ed features such as real-time, inventory-level checking and capabilities that allow them to propose alternative purchases to buyers if their desired items are sold out.

Global B2B marketplace sales expected to reach $3.6T in 2024

The move to eCommerce is occurring around the globe as companies increasingly turn to online marketplaces to meet their procure-ment needs. This shift comes as purchasing from sales agents — and engaging in the phone calls and document exchanges that the process entails — has become more cumbersome. One payments research and consulting firm recently projected that this trend could drive global B2B marketplace sales to reach $3.6 trillion by 2024, repre-senting a significant jump over the $680 billion in sales made this way in 2018. A re-cent survey of 85 purchasing managers also found that 89 percent are maintaining or

https://www.pymnts.com/news/b2b-payments/2020/bolstering-the-b2b-buyer-online-experience/https://www.digitalcommerce360.com/2020/08/31/covid-19-drives-more-business-to-b2b-marketplaces/https://www.digitalcommerce360.com/2020/08/31/covid-19-drives-more-business-to-b2b-marketplaces/https://www.digitalcommerce360.com/2020/08/31/covid-19-drives-more-business-to-b2b-marketplaces/


14News & Trends

increasing the amount of transactions they conduct via B2B marketplaces due to the pandemic.

Southeast Asian businesses work to meet rapid rise in eCommerce demand

The pandemic is also kicking eCommerce de-mand into high gear across Southeast Asia. The region’s online sales sector is current-ly in its early stages, but businesses are working to ramp up and respond to new needs, Vaibhav Dabhade, CEO of eCom-merce software-as-a-service (SaaS) provider Anchanto, explained during a recent PYMNTS interview. He said that corporate buyers now expect high volumes of goods as well as tools like financing solutions to be available through eCommerce platforms. He not-ed that sorting out logistics around delivery — especially regarding large orders — could be another major challenge for sellers, but that tools to collect and analyze data about

regional sales, product performance and other areas could help companies tackle this work. This information could help them bet-ter predict buyers’ needs and serve growing eCommerce demand.

Procurement and payrollProfessionals look to improve data management to weather supply chain disruptions

Businesses experiencing supply chain dis-ruptions are also seeking better data to help them plan and respond. Firms are focusing on obtaining the materials that go into their pri-mary products as well as the “indirect” goods they need to produce those items and main-tain operations. This could include machine lubricants, protective helmets for workers and cleaning supplies. Seventy-one percent of supply chain professional respondents in

https://www.pymnts.com/news/b2b-payments/2020/anchanto-ecommerce-smb-convergence/


15News & Trends

a recent survey said strong capabilities en-abling the management of indirect materials inventory and related data were important to coping with the pandemic.

Some organizations leveraged AI tools prior to the pandemic to help them collect and inter-pret data regarding materials and inventory, while others relied on simple tools like Excel spreadsheets to handle supply chain details. The research revealed that one-third of sup-ply chains had been using AI at that time and that this rate could increase as organizations respond to the global crisis to protect their supply chains.

How the pandemic makes cross-border payments visibility a priority

The cross-border payments that fuel inter-national supply chains can also suffer from a lack of visibility, and tackling this issue could be especially critical as business partners focus on their cash flows during the health

crisis. Cross-border transactions that move through interbank systems are often diffi-cult for buyers and suppliers to trace, Gary Conroy, chief product officer of B2B pay-ments solution provider TransferMate, stated in a recent PYMNTS interview. This can leave both parties wondering about payments’ sta-tuses and struggling to optimize their cash flows, he explained, but using digital pay-ments platforms for such exchanges could help. These tools can provide same-day payment deliveries as well as visibility into the transactions throughout their journeys, Conroy said.

USPS delays challenge paper-based payroll

Companies that have stuck with using paper checks to issue payroll or transact with oth-er companies are finding this method more challenging than ever, in part due to federal changes at the United States Postal Service (USPS) that have drastically slowed mail

https://www.prnewswire.com/news-releases/new-research-shows-only-10-percent-of-supply-chains-felt-fully-prepared-for-covid-19-impacts-301114597.htmlhttps://www.pymnts.com/news/b2b-payments/2020/rethinking-supply-chain-to-optimize-b2b-payments/https://www.pymnts.com/news/delivery/2020/usps-slowdowns-add-more-hurdles-to-b2b-payments/


16News & Trends

delivery. Employees or business partners expecting checks or items to arrive via post-al mail are experiencing waits that can be as long as several months. Many of these delays are due to changes instituted by U.S. Postmaster General Louis DeJoy that included hiring freezes and an end to over-time. This has meant that workers could not make trips after standard hours — even for letters or parcels marked for same-day delivery — and must leave the items for an-other day. Other changes have included decommissioning numerous street corner mailboxes and mail sorting machines.

DeJoy said such initiatives were undertak-en to reduce costs, but public outcry has prompted the government to hold off on continuing some of these cost-cutting ef-forts. Mailboxes and machines that had already been removed do not appear to have been replaced, however, meaning slow-downs may continue to affect the mail. This could prompt companies to examine digital payment methods rather than rely on pa-per checks, though there has been a general push to digitize B2B transactions. Some com-panies already send payroll to prepaid cards or make purchases from other firms using cards, bank rails and other digital methods, for example.

How the pandemic could lead to greater B2B payments platform connectivity

Some companies are tapping cloud-based third-party payment platforms to help them go digital and remote. These businesses can use a single application programming inter-face (API) to connect with the platforms, which can link them to various AP-related services like invoice processing and pay-ment decisioning. AR teams might use similar platforms to enable them to more easily receive and manage payments and re-lated data. Pandemic-driven corporate needs are also likely to change the platform space itself, said David Disque, president of B2B payments platform and AP automation pro-vider Corporate Spending Innovations. He explained during a recent PYMNTS interview that platform providers in the space are likely to standardize their offerings to allow data to transfer more smoothly among themselves.

Cross-border transactions that move through interbank systems are often difficult for buyers and suppliers to trace.

https://www.theguardian.com/business/2020/aug/16/usps-mail-delays-postmaster-general-changes-workershttps://www.businessinsider.com/postmaster-general-carriers-leave-mail-delays-routes-usps-postal-service-2020-7https://www.pymnts.com/news/delivery/2020/usps-slowdowns-add-more-hurdles-to-b2b-payments/https://www.pymnts.com/news/delivery/2020/usps-slowdowns-add-more-hurdles-to-b2b-payments/https://www.pymnts.com/news/delivery/2020/usps-slowdowns-add-more-hurdles-to-b2b-payments/https://www.pymnts.com/accounts-payable/2020/csi-great-digital-shift-ap-management/


17

Powering Business Growth Through AP And AR Digitization

Digitizing payments

The work-from-home, remote setups made necessary by the COVID-19 pandemic have complicated transacting between buyers and suppliers via paper checks. These pay-ment instruments are no small part of the B2B space, either, as 30 percent of 2019’s supplier payments were made via checks. Corporate buyers — or the banks to which businesses can outsource payment func-tions — may need to obtain authorizations on high-value transactions, but this becomes more challenging as offices go remote. AP teams cannot expect to easily mail prepared checks to executives at their homes for their signatures.

Companies are waking up to these prob-lems and looking to swap out paper payment methods for easier digital alternatives. An April 2020 survey of 465 financial professionals at primarily mid-market and large businesses found that 39 percent had switched over to electronic payments in response to the global

Money is the lifeblood of businesses, and nothing thwarts growth plans like the inabil-ity to easily collect revenue and pay vendors. Inefficient back-office systems can prevent smooth financial flows: Printing paper checks and requiring physical signatures can slow down payments and add complexity to AP processes, as can legacy invoice processes. Suppliers need to ensure they can generate and deliver invoices swiftly and accurately to increase their odds of being paid in a time-ly manner.

This month’s Deep Dive examines how digital supports can improve back-office efficiencies and help fuel business expansions.

DEEP DIVE

https://pv.glenbrook.com/covid-19-will-finally-force-b2b-digital-adoption/https://www.pymnts.com/accounts-payable/2020/csi-great-digital-shift-ap-management/https://pv.glenbrook.com/covid-19-will-finally-force-b2b-digital-adoption/https://pv.glenbrook.com/covid-19-will-finally-force-b2b-digital-adoption/https://pv.glenbrook.com/covid-19-will-finally-force-b2b-digital-adoption/


18Deep Dive

health crisis and that an additional 26 per-cent planned to do the same.

eSignature technologies are one such tool that can be a game-changer for these busi-nesses. These tools free up approvers from having to process paper and allows AP teams to skip the wait for checks to travel through the mail to personal addresses for signatures. eSignature technologies instead enable staff to digitally sign off on payments approval requests and other documents that they receive remotely. Such tools can make B2B payments more convenient but may not go far enough toward removing frictions for all corporate buyers.

Improving invoice processing

Processing paper invoices from suppliers can drastically lower speed, and corporate buyers may turn to machine learning (ML) tools to automate this work. These advanced learn-ing solutions can identify and extract relevant details from the invoices then flow that in-formation into AP teams’ internal routing and approval systems. These tools can pow-er improvements in efficiencies, according to a 2019 global report that surveyed 500 se-nior level decision-makers at companies that had adopted or expressed interest in us-ing AI-powered technologies to interpret and process documents. The report also said that

https://www.pymnts.com/news/payments-innovation/2020/deutsche-bank-instant-payments/https://promo.abbyy.com/rs/446-REF-821/images/content-intelligence-for-the-future-of-work-idc-white-paper-en.pdf?_ga=2.17249786.217259293.1600874712-1933291208.1600874712


19Deep Dive

prior research revealed that leveraging such technologies can reduce errors by nearly 52 percent and result in a 17 percent drop in the amount of time staff has to spend on respon-sibilities involving documents.

Companies that digitize their AP process-es can reap myriad benefits, saving their teams time and freeing them up for other tasks while also paying vendors more quick-ly and accurately, cementing better supplier relationships. Digital tools for interpreting invoices and approving and delivering pay-ments can therefore lay the groundwork for smoother business growth.

Building a better AR

Businesses need to attend to frictions im-pacting the AR sides of their operations as well, and many have found that issuing paper invoices can have undesirable impacts on the timelines for receiving their revenues. An April 2020 survey of 300 financial managers found that many companies experience past-due payments, for example, with 33 percent re-porting they waited an average of 45 days to 60 days after sales to receive compensation. Respondents also pointed to invoice errors as a key cause of late payments, with mistakes often leading to time-consuming, back-and-forth exchanges with buyers to fix issues or handle disagreements over corrections. Ninety-nine percent said billing disputes were one factor behind the late payments, and the financial technology and services firm that

conducted the study suggested that man-ual processes for preparing invoices could contribute to these disputes by enabling hu-man errors to slip in. Slow methods of bill delivery may also drag out timelines, with 18 percent reporting they still sent invoices through the mail.

Adopting digital systems for creating and sending invoices could help support the speed and accuracy of AR work, however. Switching to PDF invoices sent via email or transmitting electronic billing data directly to clients for quick processing can acceler-ate timelines, and using automation tools to generate invoices could also boost speed and accuracy. Digital customer data management systems may additionally boost AR teams’ abilities to keep billing and purchase order details organized, including any special dis-counts or payments terms that have been offered. Regularly reviewing and updating these databases helps AR staff reduce the likelihood of invoice errors.

Scaling up a business depends on mon-ey flowing in and purchases being made as seamlessly and accurately as possible. Rotating out manual, paper-based systems for digital supports and automations may un-lock important back-office efficiencies and better position companies for future growth.

https://www.digitalcommerce360.com/2020/09/02/a-lack-of-electronic-invoicing-disrupts-payments-a-new-study-finds/https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/finance/ca-en-FA-strategies-for-optimizing-your-accounts-receivable.pdfhttps://www2.deloitte.com/content/dam/Deloitte/ca/Documents/finance/ca-en-FA-strategies-for-optimizing-your-accounts-receivable.pdf


20Deep Dive

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