Ever since the advent of computerized accounting systems, paying by cheque has been one of the most inefficient manual processes in business. With FIELDBOSS being built within the Microsoft Power Platform, our clients have embraced options for back-office automation unlike their industry cohorts. Going forward, business-to-business (B2B) payments will become a predominant aspect to their accounting systems as contractors, their suppliers, and their customers are more able to embrace digital payment options on both the collection and payment side of things.
Portal Integration Between AR and AP Vendors
Suppliers are now more often requesting that buyers pay them through their dedicated AR automation portals. On the other side of the table, larger contractor buyers can request that their suppliers log into their dedicated AP automation portals to collect payment and find the associated remittance information. For buyers and sellers alike, this means having to manage multiple portal logins, and track payment information in multiple locations. This inevitably leads to something called “portal fatigue” as staff try and navigate the usability differences between all the different portals they are faced with.
Many buyers, especially those from larger companies with leverage, will not use their supplier’s payment portal. Instead, they continue to send payment through cheque or EFT which makes it difficult for the supplier’s AR team to issue invoices and reconcile payments outside their automated environments. To address this issue, AR and AP automation software vendors are starting to work together to build stronger integrations between their platforms.
Network to Network Effect
The lack of common systems between AR and AP departments makes the B2B payment experience time consuming and frustrating for both buyers and suppliers. Financial institutions and credit card networks are aware of this and are beginning to build B2B payment networks in an effort to streamline the way companies send invoices and payments to one another. An example of this would be Visa's B2B Connect, which focuses on simplifying the processing of payments. As businesses increasingly transact with customers and vendors through AR and AP automation solutions, these platforms become networks in and of themselves, and this is how networks of networks evolve. The idea here though is that the burden of an accounting department decreases as accounting departments will not need to understand as many payment portals.
Customer experience will be front and center in AR processes
The invoice to cash process traditionally gives B2B buyers and suppliers minimal visibility into the status of outstanding payments. Buyers often don’t have easy ways of knowing what they owe and what credits they have available. Similarly, suppliers don’t have easy ways of knowing if buyers are working on sending payment. With few ways to communicate with one another apart from emails and phone calls, requesting simple clarification on an invoice can lead to payment delays and poor cash flow for contractors. For the many accounting departments that will be bringing automation into their operations for the first time, tools that prioritize customer collaboration will be the priority.
Using AI to improve the AR Process
Microsoft Dynamics Business Central accounts receivable automation will layer artificial intelligence to help AR staff in compiling remittance information and matching to open receivables automatically. Back-office accounting processes such as cash application are the great candidates for artificial intelligence, as they typically revolve around repetitive tasks and situations that a machine-based logic can be applied to relatively easily.
Ecommerce, virtual cards, and buy now, pay later (BNPL)
Cheque use is in a steady decline, as contractors move forward with greater adoption of ACH and credit card payment methods. Business buyers have a growing interest in consumer-centric payment methods and they are expected to become more popular going forward. Installment payments like buy now, pay later (BNPL) are also gaining interest, with payment card networks partnering with financial institutions and fintechs to fuel expansion of BNPL in B2B payments.