Expect digital transformation of business-to-business payments to accelerate in 2022 as companies trade paper checks and manual processes for the efficiencies, cost savings and ease of B2B payments automation. By 2025, global B2B non-cash transactions are projected to reach $200 billion, a 65% increase since 2020.1
Feeding into this growth is the consumer-driven upsurge in buy-now-pay-later (BNPL) programs. If you haven’t understood the B2C craze for BNPL, it’s this: the modernized, app-enabled version of pay-over-time plans takes customer-centricity next-level in buying experiences. B2B buying experiences are long overdue for this leveling up, and in 2022 B2B companies are asking, why not BNPL for B2B customers too?
The market for B2B payments automation is exploding; solutions like Apruve are enabling their digital transformation. If 2022 is to be a tipping point for growth of your organization, this technology has to be part of your strategic plan. The most powerful trends in the payments market covered next will factor into your decisions as you integrate B2B payments automation in your business.
What can accounts receivable automation do for organizations?
You’re not the only hold-out if your company still uses traditional payment processes rather than accounts receivable automation. Paper checks represent more than 50% of the value of B2B payments.2 However, the status quo is holding your business back, costing you money and resources:
- Businesses that rely on manual AR processes have 30% longer average days sales outstanding (DSO).3
- Companies that use automated invoicing realize up to 60% improvement in labor productivity and up to 50% reduction in fixed costs. 4,5
At a time when write-offs for bad debt are increasing significantly, and 25% of credit departments do not have adequate staff to manage their workload, can your organization continue to afford paper? 6,7 In addition to the efficiencies and cost savings that A/R automation brings, your organization can realize important gains with your customer experience and cash flow forecasting, too.
Improve customer experiences with B2B payments automation
In many companies, creating modern buying experiences for their B2B customers is a key reason to implement B2B payments automation. More than eight in ten (82%) of U.S. buyers expect the same customer experience with B2B purchases as they do with B2C.8 That means offering a 100% digital procure-to-pay process customers can easily manage through a buyer portal, and net terms and other payment options that fit B2B customers’ needs. Leading B2B payments automation platforms have standardized and accelerated transactional activities, and make it easy for B2B buyers to pre-qualify for credit and onboard quickly.
A/R payments automation is helping organizations meet changing B2B buyer expectations with buying experiences that favor them in the market and encourage customers to expand the relationship.
Improve revenue predictability with financed A/R automation
Nearly half (40%) of large and mid-size organizations are working to reverse the trend in longer DSO with A/R automation.9 A B2B payments solution can substantially reduce DSO and reduce or eliminate Days Beyond Term (DBT). As a result, organizations can improve cash flow forecasting and their ability to plan for growth. Learn more about the ways A/R automation enables powerful business growth.
The rebirth of BNPL
Buy-now-pay-later (BNPL) isn’t new, but it saw a rebirth in 2021 with B2C commerce as providers like Klarna and Affirm married the convenience of mobile apps with the original installment plan concept. Consumer-centric Klarna has grown quickly to 100 million global active users and 2 million transactions per day, demonstrating favorable consumer response to instant purchasing which allows payment over time, generally interest-free.10
As consumer interest in BNPL has exploded, B2B companies are exploring BNPL as a solution for accelerating payments and creating more consumer-like buying experiences. It is particularly attractive for ecommerce leaders who see the synergistic connection between simple, 100% digital buying B2B experiences and increases in AOV and purchase frequency. Apruve fully meets the BNPL needs of B2B ecomm companies through an automated, fully financed credit program built right into your checkout. Apruve offers credit limits in excess of $1 million to accommodate increased AOV, and localized transactions in over 40 countries and growing. Read this FAQ to understand how BNPL works for B2B buyers.
B2B companies should be on the lookout for new or expanding BNPL regulation in 2022 and the next few years.11 Regulators’ primary concern is that consumers are using BNPL apps without fully understanding late payment fee structures and the potential implications for credit scores. Though it is unlikely that regulators would have the same concerns with BNPL in the B2B sector, the trend in regulatory changes is worth watching.
Seamless integrations with B2B payment systems
The B2B payment solutions that lead in 2022 will integrate seamlessly in order for their clients to realize the full return on their investment. Seamless integration is achieved through APIs that connect the payment system with the company’s ERP, automated A/R platform, and where applicable, ecommerce platform.
With API integration, data exchange between the systems:
- Is automated, to avoid manual effort by your A/R team and reduce errors
- Is real-time, to create fast, digital buying experiences for your customers
- Requires minimal effort by IT teams
The goal with seamless integration is a customized, closed-loop receivables trade credit program for B2B buyers. Apruve delivers on this goal with APIs that connect with ERPS like SAP and Oracle, and with traditional A/R platforms like HighRadius and Billtrust. With ecommerce applications, Apruve builds an automated, fully financed credit program right into your checkout. Apruve connects with ecomm platforms like Magento and Mirakal via API. Find out more about how Apruve automates the procure-to-pay process.
Increased focus on cybersecurity
As the online payment market increases, the importance of cybersecurity for B2B payments automation will continue to grow. The incidence of cyberattacks doubled in 2021, and many companies view cybersecurity as their top business concern for 2022.12 Customers and potential investors will be looking to B2B companies for assurance that their cybersecurity can protect customer data from hackers and prevent disruption of business processes and damage to IT infrastructure by cyberattacks.
B2B Payments Automation: Key to Business Growth
Digital transformation of B2B payments is happening in 2022. Leading organizations will naturally select B2B payment solutions that solve multiple pain points, from changing B2B customer expectations to too-long DSO and too-high fixed costs. By removing some of these barriers with automation, organizations set themselves up to capitalize on evolving market conditions and new opportunities for growth. To talk about specific potential in your organization to increase efficiencies and growth through financed A/R automation, talk with the specialists at Apruve.
Sources
1 https://www.capgemini.com/us-en/news/capgeminis-world-payments-report-2021/
2 https://www.mastercard.us/content/dam/mccom/en-us/business-payments/documents/business-payments-2022-whitepaper.pdf
3 https://www.pymnts.com/news/b2b-payments/2020/automating-accounts-receivables
4 https://info.ivalua.com/hubfs/2019-P2P-Study-Digital-Gap-Hackett-Ivalua.pdf?hsLang=en
5 https://apruve.com/use-cases/credit-ar-automation/
6 https://www.credittoday.co/
7 https://www.gartner.com/en/newsroom/press-releases/2021-07-07-gartner-finance-research-shows-bad-debt-increased-26-percent-in-2020
8 Salesforce State of the Connected Customer Report second edition.
9 https://www.pymnts.com/accounts-receivable/2021/40-pct-large-mid-sized-firms-take-aim-at-longer-dso-with-ar-automation/
10 https://www.klarna.com/international/press/klarna-fuels-global-expansion-with-the-launch-of-rewards-program-and-pay-now-in-nine-new-markets/
11 https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/02/02/regulators-scrutinize-buy-now-pay-later-plans
12 https://www.forbes.com/sites/chuckbrooks/2022/01/21/cybersecurity-in-2022--a-fresh-look-at-some-very-alarming-stats/?sh=2e1244f66b61
