Frustrations over delayed payments are on the rise, prompting businesses to upgrade their B2B transactions and other payment processes. In fact, 51% of firms are planning to digitize their payments within the next few months, according to the Next-Gen Digital Payments Report, a PYMNTS and Transcard collaboration.
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Integrating enterprise resource management (ERP) systems and other tools that allow businesses to manage their payments more carefully and introducing swifter transaction methods, such as account-to-account (A2A) payments or embedded finance, could help businesses remove frictions from their accounts receivable (AR) and accounts payable (AP) processes.
“Embedded payment solutions seamlessly connect legacy software and ERP application, banks, payment rails and cloud-based services to facilitate the digital, touch-free exchange of currency and data between trading partners,” Transcard CEO Greg Bloh told PYMNTS.
Streamlining B2B Payments
More companies are beginning to take a broader interest in ERP systems potential benefits in this regard. PYMNTS data found that 65% of businesses with annual revenues between $25 million and $100 million claimed that their lack of access to an integrated ERP system was holding them back from their digitization goals.
So, the hunt is on for solutions and technologies that can help streamline B2B payments, from automating historically cumbersome processes, such as invoicing or data collection, to researching newer, speedier payment methods. Interest in real-time payments or A2A for AR and AP transactions is rising, as is the use of automated clearing house (ACH) transfers.
Other companies are looking toward embedded solutions to make their B2B payments more efficient, but it is essential to consolidate these emerging technologies into a single platform that offers a transparent view of all data. Reliance on siloed systems to conduct different types of transactions or manage vendors and business partners will simply add back the complexity and time that companies are attempting to reduce.
Pairing ERP Systems With Emerging Technologies
“The AR and 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,” Bloh said. “While these point solutions and closed-loop networks may help automate parts of the AR and AP lifecycle, their ‘arm’s length integration with legacy software and ERP applications makes it impossible for them to eliminate the currency and data silos that are holding AR and AP back.”
Businesses must examine how they can pair ERP systems with emerging technologies such as machine learning (ML) and artificial intelligence (AI) amid shifting payment needs of both consumers and clients. Enabling swifter B2B payments is becoming a necessity for businesses that wish to remain competitive, meaning that companies must quickly determine how they can best upgrade their existing payments infrastructures to keep pace.
“Touchless processing can become a reality,” Bloh said. “Embedded payment solutions are ushering in an age of innovation in AR and AP.”
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