3 Ways Automation Is the Shortcut to Reducing B2B Payments Friction

Better business-to-business (B2B) payments need to reduce costs, enable scalability, and support data-driven decision-making.

Traditionally, the manual processes supporting the accounts payable (AP) and accounts receivable (AR) function have tied up back-office operations with labor-intensive, error-prone and time-consuming workflows. These incumbent processes often involve repetitive tasks such as data entry, invoice processing, and payment reconciliation, which require substantial human resources.

But with the news that Slope has secured $65 million in strategic equity and debt funding to scale its B2B payments platform for enterprise companies, while data from the latest PYMNTS Intelligence reveals that digital payments can result in healthier cash flow and more efficient financial operations, embracing automation to unlock better B2B payments is top of mind for both buyers and suppliers.

The digital landscape has transformed the calculus around the ease, convenience and visibility that firms expect from their B2B payments, and the reality is only trending toward further convenience and a streamlined user experience as generational shifts reshape the B2B ecosystem.

Read more: Digital Payments for Improving Cash Flow and Customer Experience

The Cost Reduction Imperative

One of the most compelling reasons for businesses to embrace automation in AP/AR processes is the potential for a reduction in costs.

PYMNTS Intelligence finds that AP staff have been working extra hours as they use legacy and manual procedures to handle a growing number of invoices, with 75% of AP teams reporting they processed more invoices in the last quarter.

“There’s a lot of messiness around payments, particularly very large B2B payments that might house hundreds or thousands of invoices with hundreds of associated line-item details,” Boost Payment Solutions Founder and CEO Dean M. Leavitt told PYMNTS. “Large enterprises on both the AP and AR side are looking for ways to automate those processes, digitize them and reduce their cost as well.”

That’s because automated systems can handle large volumes of transactions with speed and accuracy, freeing up human resources to focus on more strategic activities.

“You’ve heard the expression better, cheaper, faster,” Ben Lamm, chief operating officer at Capital One’s Trade Credit Business, told PYMNTS last summer. “I think automation really helps with faster and cheaper.”

Scalability and Data-Driven Decision-Making

PYMNTS Intelligence in the inaugural edition of “The 2024 Certainty Project Report” found that uncertainty, particularly around payments, costs middle-market companies more than $20 million on average. Many of these uncertainties stem from incompatible technologies, manual data entry and the complexities of legacy systems that result in poor data quality.

Legacy frictions, such as paper-based processes, siloed systems, and lack of integration, have long plagued B2B operations. These frictions not only hinder efficiency but also increase the risk of errors and delays. 

As businesses grow, their transaction volumes increase, and managing these transactions manually can become daunting. Automation allows companies to scale their operations seamlessly without the need for proportional increases in staff or resources.

“Corporations in America are using some very old, very reliable monolithic systems to manage their treasury function, in this case, their AP processes that decide who to pay and how to pay — and they’re still relying on those workflows,” Ernest Rolfson, CEO and founder of payments-as-a-service solution Finexio, told PYMNTS.

Automated systems can digitize and centralize invoices, eliminating the need for paper-based processing. They can also integrate with existing enterprise resource planning (ERP) systems, ensuring seamless data flow across different departments. This integration eliminates silos and enhances collaboration, leading to more efficient and streamlined operations.

Read more: From Cash Flow Pain to Working Capital Gain: Automated AR/AP Solutions for SMBs

“A typical client is one that is focused on having their data reporting automatically fed into the ERP or TMS,” Meg Garand, head of CashPro Payments and CashPro API at Bank of America, told PYMNTS, noting that while, historically, that process has taken four to six weeks, “we’ve had numerous clients go live with current day reporting and or previous day reporting across all of their accounts within one week.”

“It’s not just the visibility, it’s the real-time visibility and being able to take that data and transact and make decisions based on that data in real time,” Ari Widlansky, managing director and U.S. chief operating officer at Esker, told PYMNTS in a separate conversation. “This is where you can unlock value across the entire invoice-to-cash experience.”

Compliance and security are also paramount concerns in B2B operations. Businesses must adhere to various regulatory requirements and ensure that their financial data is secure. Automated AP/AR solutions help enhance compliance and security by providing robust controls and audit trails.

Additionally, automated systems offer advanced security features, such as encryption and access controls, to protect sensitive financial data from unauthorized access and cyber threats.

Ultimately, as businesses strive to optimize their operations and gain a competitive edge, adopting modern automation solutions is not just an option — it is an imperative.

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