Two-Thirds of Businesses See Friction From Poorly Integrated Payments Processes.

By PYMNTS



As companies hunt for solutions and technologies that can help streamline B2B payments, consolidating them in a single platform that offers a transparent view of all data has proven to be a time- and money-saving change of choice.


Reliance on siloed systems to conduct different types of transactions or manage vendors and business partners will add back the complexity and time that companies are attempting to reduce.


In fact, 65% of businesses with annual revenues between $25 million and $100 million say that lack of integration with enterprise resource planning (ERP) systems is a digitisation hurdle, according to the August 2021 Next-Gen Digital Payments Report, a PYMNTS and Transcard collaboration.


“The [accounts receivable (AR)] and [accounts payable (AP)] functions at most businesses rely on a hodgepodge of point solutions and closed-loop networks, each with their own logins and passwords, user requirements, file formats and proprietary integrations with legacy software and ERP applications,” Transcard CEO Greg Bloh told PYMNTS.


Achieving AR and AP Innovation

While those solutions may help automate parts of the AR and AP lifecycle, their currency and data silos are holding AR and AP back.


“Only by embedding payment solutions within legacy software and ERP applications can businesses and banks achieve the AR and AP innovation [they are seeking],” Bloh said. “Embedded payment solutions seamlessly connect legacy software and ERP applications, banks, payment rails and cloud-based services to facilitate the digital, touch-free exchange of currency and data between trading partners.”


ERP systems can provide a platform for smoother AR and AP processes while also supporting emerging B2B payment use cases, such as account-to-account (A2A) and embedded payments.


Pairing ERP with other technologies, such as the cloud and automation, could bring further benefits to companies as they look to innovate their B2B payment operations.


Upgrading for Greater Efficiency

Innovating AP and AR processes for smoother experiences requires that chief financial officers (CFOs) and other decision-makers upgrade several of the steps and features involved for greater efficiency.


Offering instant payment methods such as A2A transfers, which move funds directly from one bank account to another, could alleviate some of the frictions inherent in historically manual B2B payment processes, such as having to wait for check deposits to clear.


Businesses also must be sure they can transfer the attached payment and client data just as swiftly as the actual funds in order for A2A or other instant payment methods to work as intended.


Making a Big Step Up

Pairing A2A or embedded payments with an ERP system is one way that businesses could solve both friction points, offering swifter solutions to clients while being able to manage attached details seamlessly on the back end.


For these reasons, integrating embedded or A2A payments within ERP systems should be a top priority for companies across industries.


“Managing payments and related data from within legacy software and ERPs is a gamechanger for AR and AP,” Bloh said. “This ‘inside-out’ approach to automation also [is] a big step up from the point solutions and closed-loop networks that have delivered middling results for most AR and AP departments.”