PYMNTS-MonitorEdge-May-2024

New Data: 15% of Receivables Are Late

Firms making domestic and international business-to-business (B2B) payments face many challenges as they craft seamless order-to-cash (O2C) processes. The primary issue is information management; they must collect, categorize and verify vast amounts of data and then share it among the departments and systems that firms utilize to track orders, complete invoices and request payments. 

Companies must also handle the sheer volume of data that accompanies each order. Achieving this manually or with outdated technologies is becoming nearly impossible, as wading through complex piles of paperwork only extends payment cycles. For example, one recent study found that about 15% of B2B receivable payments are late, as reported in the “Global B2B Payments Playbook,” a PYMNTS and Worldpay B2B Payments collaboration. 

Get the report: Global B2B Payments Playbook 

The growing amount of data also increases the likelihood that employees will make errors or omit critical information to firms’ financial detriment. 

Integrating Automation Into O2C Processes 

B2B firms can ill afford costly data-entry errors as the pandemic batters their revenues. These firms are thus seeking tools to help them process information swiftly and accurately, with many examining the benefits of emerging technologies such as automation, which is taking center stage as businesses look to square their outdated O2C processes with their clients’ expanding digital demands. 

Automation and artificial intelligence (AI) can accelerate domestic and cross-border B2B payment processes by reducing the time and resources required to finalize attached documents and categorize relevant payments data. Incorporating some degree of automation into their accounts payable (AP) and accounts receivable (AR) processes can help businesses add transparency for merchants, allowing them to better monitor their cash flows. 

Read more: AR Automation and Overcoming the Challenges That Can Prevent Successful Implementation

Integrating automation into overall O2C processes could give companies significant advantages over their competitors, especially when categorizing and interpreting the growing amounts of data firms must collect. 

Shifting Toward a New Digital Normal 

With the adoption of technologies like these, the O2C process appears to be shifting toward a new digital normal. Companies and their payment partners have been incrementally incorporating new technologies to enhance or innovate aspects of their O2C processes. Businesses are also implementing tools that add speed and efficiency to their payments as they work to avoid frictions that stall their O2C processes. This indicates that firms are beginning to evaluate how their B2B payments processes can accommodate their changing needs and those of their clients.  

See also: 62% of Firms Realize DSO Improvement From AR Automation

Numerous technologies can help businesses better understand their order information and approach their O2C processes more holistically, which could be a key advantage to helping them operate in an increasingly digital global commerce landscape. Conversely, failing to adapt to firms’ shifting O2C and cross-border B2B payment needs could result in these firms losing their competitive edges. So, businesses must approach O2C innovation strategically to stay in the game. 

PYMNTS-MonitorEdge-May-2024