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Cards, automation can help B2B clear cash flow clutter

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Now that cash flow is king, companies are shifting to accommodate more ACH enablement outreach.

While you’re reaching out to your suppliers, it may be worth your time simply asking if they would accept card payments. Wrapping these initiatives into a payment automation solution may enable your AP department to run lean in the cloud indefinitely.

An independent program works well when companies are highly integrated between their ERP system and their bank.

In these scenarios, the company usually has most of their suppliers set up to receive ACH payments, simplifying the reconciliation process. However, adding more payment automation over the top of existing automation would be redundant, closing the door on additional revenue that might be generated from a card program down the road.

Larger companies should look at comprehensive payment automation solutions with virtual card embedded into them, even if you don’t plan to use them right away.

Automated solutions wrap all payment types into a single workflow, making it easy to offer several options to suppliers without adding to AP’s daily workload. Because suppliers are continuously enabled for electronic payments via a supplier network, most companies can immediately pay a significant percentage of their suppliers electronically with no effort. Paying by check also becomes as simple as submitting a pay file and approving it. This simplified process cuts out a significant portion of AP’s manual tasks, leaving them more time to focus on higher-level initiatives.

By automating the whole payment process, including enablement, reconciliation, and error resolution, AP teams usually see cost reductions of up to 70%. When you add revenue from card payments into the equation, AP can become a profit center.

Card payments still only account for about five percent of B2B payments. There’s a significant opportunity that companies have been missing out on, either because they haven’t researched virtual cards, don’t want to do the supplier outreach, or haven’t found a partner that can help them make it work. Due to processing fees, not every supplier will accept card payments. Still, a surprising number—around 20% of suppliers, in my experience—will say yes if they’re asked.

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B-to-B payments Cloud computing Payment processing Digital payments
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