Within the business-to-business (B2B) payments ecosystem, small- to medium-sized business (SMB) payors cite several issues that they typically face when making payments to suppliers.
Topping the list is manual invoice review, which is cited by the greatest share of SMBs as a problem that they experience when making payments to suppliers, according to “The Future of Business Payables Innovation,” a PYMNTS and Plastiq collaboration based on a survey of 500 SMBs with revenues between $500,000 and $100 million.
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The survey found that 45% of the SMBs cited manual invoice review as a problem when making payments, with 19% saying it was their top issue and another 26% saying it was among the problems they experience.
That ranked it first among 18 problems that were included in the survey.
Losing Visibility, Control
When invoicing processes are not automated, SMBs lose visibility into cash flows as well as control over liquidity. Manual invoice entry can cause errors that lead to more time spent correcting incomplete payments.
On the other side of these B2B transactions, most supplier concerns are associated with frictions in managing their enterprise resource planning (ERP) systems. PYMNTS found that 47% of suppliers have issues anticipating when payments will arrive, and 44% are concerned about the invoice approval process.
A single payments automation option with payments customization would enable both payors and suppliers to pay and receive funds in the method most convenient for them.
Tech-driven all-in-one payment solutions provide an alternative that not only offers a way to pay vendors via any payment method, but also help streamline back-office functions, Plastiq Chief Operating Officer Stoyan Kenderov told PYMNTS in an April interview.
Read more: How All-in-One Platforms Can Lower the Cost of SMB Payments
For example, invoices can be captured automatically, through email forwarding; optical character recognition (OCR) eliminates errors, and instant payments help firms sidestep the cost of sending checks.
“We live in the 21st century,” Kenderov said, “and we have technology that can take care of all the things that people have been doing through manual means.”
Digitizing the Back Office
According to PYMNTS research, most executives of accounts payable (AP) or accounts receivable (AR) software companies believe their business customers would be interested in the choice and convenience of an all-in-one payments solution that automates how they make and receive payments and manage their cash flows.
Such a solution takes shape as an embedded finance offering within platforms and marketplaces and enables multiple ways to pay any supplier via any payment method regardless of how the supplier wants to accept payment.
A key benefit is digitizing the back office once and for all, even as customers and suppliers might remain stuck in legacy, paper-based processes.
PYMNTS research also revealed that many SMBs are ready for an all-in-one payment platform, and most are ready to pay for it. As SMBs gain access to more effective all-in-one payments solutions, and platforms and marketplaces can embed more payment options natively, the entire ecosystem may benefit.
