During the pandemic-driven digital transition, much of the business world has stopped using paper in B2B transactions. In response to new cash flow crunches, shifting employee work habits and digital growing pains, they have moved to making and receiving digital payments.
In fact, 76% of small and medium-sized businesses (SMBs) say the pandemic has prompted them to enhance their digital payments capabilities, according to Enabling B2B Payments For The Virtual Workforce, a PYMNTS and ConfermaPay collaboration.
These businesses are now using digital spend management tools ranging from cloud-based spend management platforms to virtual cards to reshape their payments operations to meet the needs of their decentralized workforces.
Adopting Touchless and Mobile Payment Solutions
Virtual cards have gained traction in B2B markets as firms seek out touchless and mobile payment options. In addition to providing those benefits, virtual cards enable payments automation and operational cost reductions. They automate the entire B2B transaction process, eliminating the need for manual intervention when finalizing payments to suppliers, for example.
This means they can ease the stress placed on accounts payable (AP) departments by reducing employees’ manual tasks and lowering the costs of the entire payments process. In fact, research suggests that AP teams that implement straight-through B2B processing can expect their processing costs to decrease by as much as 70%, making them especially beneficial in an economy in which 72% of SMBs do not have access to enough funds to stay open for more than a month if their revenue streams are disrupted.
Increased virtual card usage for B2B payments goes hand in hand with consumers’ rising interest in using smartphones and mobile wallets for B2C transactions. As consumers are growing accustomed to using their smartphones for everyday purchases, they are naturally beginning to desire and even expect digital payments experiences in their professional lives too.
Digitizing Procurement Operations
Businesses have also found that digitizing their procurement operations not only meets immediate needs during the pandemic, but also allows them to streamline their operations in ways that are not possible with paper-based processes.
Legacy procurement operations can severely limit businesses’ abilities to make real-time assessments with the most accurate data, especially when information is logged manually. In fact, procurement decisions based on false, inaccurate or outdated details cost U.S. companies a collective $600 billion annually.
Newer alternatives, including digital procurement systems, such as cloud-based platform solutions, can allow businesses to efficiently collect, store and analyze data to optimize their operations. Advanced data analytics and automation can help firms determine optimum workflows, reduce errors and eliminate redundancies. Companies would therefore benefit from considering procurement innovations to be long-term investments in payments optimization rather than quick fixes to a temporary problem.
During the pandemic, companies across the nation have been faced with unprecedented financial and logistical challenges, leading them to seek cost-effective, decentralized digital processes and payments. With the adoption of such innovations as virtual cards and digital procurement solutions, they have found solutions that are both immediate and long lasting.