So far in our series on the current landscape of B2B Payments, we’ve looked at the slow shift taking place from paper to automatic processes, as well as highlighting the fact that simply making electronic payments is only one aspect of automation – there are also vital data insights to glean and savings to make by employing the best B2B payment technologies.
Today we finish up by digging a little deeper into Ardent Partners’ recent “State of B2B Payments” report, exploring what the research firm believes businesses need to do in order to turn their Accounts Payable (AP) teams into a key part of overall corporate strategy.
Focusing the final third of its report on how automation is fueling success at best-in-class businesses, Ardent Partners says, “When implemented properly, payment automation can provide substantial financial gain to the enterprise in addition to allowing AP to prove its strategic value. It is through these technologies that AP can prove its financial importance to the organization, and can rightly take its place as a source of intelligence and value.”
The key word here is “properly”, and Ardent Partners shares some stats about the ePayment capabilities of what it defines as best-in-class businesses (20% of those they surveyed).
According to the research, best-in-class business are 59% more likely than competitors to use a web-based supplier portal that automatically provides information updates to AP, gives greater visibility into payment status, and allows buyers and suppliers to “transact in a many-to-many environment.”
These advantages feed into what Ardent Partners calls its Strategies for Success. Perhaps the most interesting of these strategies is the recommendation to “develop the analytical capabilities to turn payment information into business value.” The report expands on the suggestion, saying, “With most ePayment solutions, the AP team ends up collecting extensive information about supplier payments. Just having the data is not enough, however, as it is imperative that AP develop the capabilities to organize and analyze its financial data so that it can derive intelligence. Only through detailed analysis can AP make sense of the valuable financial data it collects, and only then is AP able to share that data in a way that other teams can use.”
For companies that heed the advice to lean on the best available tech for payment automation and data insight, the benefits are significant. Best-in-class businesses experience a “fully-loaded” payment processing cost of just 89 cents – 91.6% lower than other businesses. They also process 63% more invoices straight-through without manual intervention, saving time and money as well as freeing up resources to focus on more critical business issues.
Those numbers are impressive, but the fact that 80% of businesses still aren’t tapping into the technology that would allow them to achieve similar results is a massive missed opportunity.
The extent of that missed opportunity no doubt feeds into Ardent Partners final strategy for success, which is to “Investigate and track innovations in B2B payments.” They argue that only by waking up to the best automation technology available – or convincing decision makers and trading partners of its value – can businesses begin to dream of making the same gains as the competition.
In the report’s words; “A new dawn and a new day awaits those forward-thinking AP groups that seek to take advantage of ePayments’ emerging business value, and drive the ultimate benefits from this critical function. The simple fact of the matter is that there is significant untapped value in the financial supply chain, particularly the supplier payment operation, which is available only to the enterprises that can unearth it. Enterprises that do not closely examine their payment processes to ferret out inefficiencies and push for change thus run the risk of wasting staff time and money and falling behind the competition.”
Today, with paper still overly prevalent in back offices and the overwhelming majority of businesses failing to take advantage of the best B2B payment tech available to them, it seems that “new dawn” is still some way off for most. For those that get on board now, then, B2B payment technology represents more than just gains in data-led intelligence and savings in time and money – it also equates to a head start that could keep your business ahead of the pack for a very long time to come.