Remote work or not, current B2B payments aren't up to snuff

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The future of business payments has been a hot topic, with no shortage of opportunity or ideas when it comes to transforming B2B transactions.

However, the future of B2B payments is being impacted by an unforeseen challenge that has taken its toll on a variety of industries, professions and business interactions: the coronavirus pandemic. The adoption of technologies and ideas that drive modern and innovative ways of working has long been a focus for businesses, but the need has never been more acute or the timeline more compressed than it is right now. Simply put, the pandemic we’re all navigating our way through now has made it clear that the time to accelerate the digital transformation of B2B payments is now.

There are several ways the coronavirus has shown that traditional manual, paper-based AP processes are not up to the task in 2020 and beyond. Here are the ones we’ve seen come to the fore in recent weeks, along with the ways we’ve seen how creative, resilient companies can address them to emerge better than ever.

In a recent survey Strategic Treasurer notes that 47% of organizations said AP fraud was their major area of focus heading into 2020, and the coronavirus has likely driven that number up. Phishing attempts, account takeover and internal fraud are all scenarios that customers are dealing with, and now they must defend against these issues with employees more dispersed and remote than ever before. That’s an especially big problem now, as the Strategic Treasurer/Treasury Coalition Global Crisis Monitor found one in five businesses surveyed said they hadn’t factored security in to business continuity plans. Businesses need to ensure that security awareness and technology are integrated within internal training processes for any payment solutions they are using. Cyber fraud technology that can detect suspicious activity to thwart account takeovers, multifactor authentication that can better validate users initiating payments or accessing account information, and intelligent insights that can detect patterns of activity that should be flagged for further review are all must-haves.

Traditionally finance and payment professionals operated in the office, which allowed or even encouraged paper-based processes to remain the standard. This is no longer the case. As virtual work becomes the norm, organizations need to ensure they embrace modern technology that is easy to learn and use and which supports business workflow, approval and reporting requirements. Finance professionals need to get comfortable with embracing mobile capabilities that will further streamline the jobs of their entire teams.

Paper-based payment processes are not only inefficient, fraud-prone and costly, but in this current environment have exposed more business to the negative impacts on their liquidity. Organizations are looking for ways to cut down on how often they issue paper checks. Suppliers do not have employees available to handle and post those checks which creates a large burden on cash flow. Faster electronic payment methods like virtual cards, ACH and new models like real-time payments can create a better balance for all parties in the payment transaction. Buyers can make payments from anywhere in a more secure and cost-effective way, while suppliers can receive and reconcile these payments no matter where they are located. Maintaining positive business relationships and helping one another optimize AP and AR processes is more important than ever.

A major catalyst for change is almost always tied to an event that brings to the forefront tactics and strategies that people knew they should have embraced before, but for good reasons or simply inertia did not. While I don’t foresee an end to paper payments in the next few years, there is absolutely no doubt the acceleration of a digital-first approach in the B2B payments space is already happening. Even after the current pandemic passes, the future of B2B payments will continue to be about automating more processes, enabling remote work and business continuity, enhancing security and decreasing the global reliance on paper in accounts payable. The right set of payment technologies can help finance professionals fully embrace the technology available to them today and future proof their processes for the long-term.

There’s no way to know when we’ll all be back to the office or what that environment will look like, but it is clear that the time for transformation is now.

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B-to-B payments Checking Digital payments Payment processing ACH