The way businesses buy and sell to one another has historically been full of friction.
At the center of it is how firms pay and get paid.
Now, a shift in behavioral expectations is driving a steady digitization of B2B relationships, particularly across next-generation B2B marketplace platforms. This foundational shift is reshaping historical buyer and seller dynamics by optimizing the transaction journey with future-fit efficiencies.
Today’s new normal is opening a white space opportunity where removing legacy bottlenecks along the payments journey is emerging as a key competitive differentiator.
Digital marketplace platforms have emerged as a central utility for basic goods purchases, as well as production inputs and access to financial services, allowing both buyers and sellers to benefit from network effects and access previously untapped growth verticals.
The most successful modern relationships are increasingly being built across dynamic and innovative platforms, as well as being supported further by emergent digital tools that help businesses mitigate today’s macro challenges, including the higher cost of credit, historic inflation, rising interest rates and the ongoing threat of further economic contractions.
Shared efficiencies are fundamental to building better B2B relationships while speed to revenue and speed to cash flow are critical to individual firms’ success — both in the near term and the long term.
The payment tech powering modern B2B marketplaces offers a wide breadth of relational synergies but frequently centers around providing a single source of truth to organizations looking to corral fragmented and disparate internal information and data.
To have an impact, B2B payments must move as fast as customer and vendor needs.
“Payments is the last piece of the pie when it comes to simplifying relationships between [buyers and sellers],” Taylor Katzman, founder and CEO of B2B alcohol marketplace Provi, told PYMNTS earlier this month.
Using technology to streamline that process is crucial to effectively activating payments as a tool for better connecting businesses.
“These new tech innovations [being brought to market within the industry] are meant to organize an entire relationship that was previously unorganized, and where efficiencies slipped through the gaps,” Fernando Correa, CEO and co-founder of international digital trade company Cargobot, separately told PYMNTS.
Aging payables systems can turn regular interactions into headaches while hamstringing businesses that need quick access to critical funds.
See also: How Embedded Payments Can Drive Cross-Border B2B Marketplace Success
Increasingly, the most important thing a B2B marketplace can provide is streamlining historically fragmented relationships between buyer and seller — relationships that have often relied upon manually-driven processes resulting in taken-for-granted inefficiencies.
“If businesses are mailing invoices or doing things the way they were done 10 years ago, they won’t get the speed to cash they want or need,” Bob Purcell, chief financial officer of B2B accounts receivable (AR) automation and digital payments platform Billtrust, told PYMNTS. “But if you put automation in there and let technology do what it does best by providing buyers with multiple ways of paying how and when they want while letting the technology drive the optionality with less manual effort, organizations can build stronger relationships and drive better business outcomes.”
Particularly amid today’s ongoing macro challenges, optimal management of days payable outstanding (DPO) and days sales outstanding (DSO) can either make or break a business.
PYMNTS research in “The One-Stop Bill Pay Playbook” found that nearly two in three firms across industries expect to integrate B2B payment innovations into their operations this year.
Modern tools can help drive growth by leveraging the ongoing digitization of the B2B space. Future-fit integrated solutions, including artificial intelligence (AI) and machine learning (ML) capabilities, can provide data-rich insights and allow businesses across both sides of the transaction to realize new growth engines and drive more value across each interaction.
Removing manual clerical work around the payment occasion while better connecting buyers and sellers through information sharing that drives growth, is the key value-add of B2B marketplaces beyond just access to new goods, services or markets.
Still, confusing payment interfaces for payors and missing features for payees are among the top complaints of B2B transactions — making it critical to ensure transactional alignment when digitizing relationships.
An emergent paradox of old, new and necessary is helping drive next-generation digital marketplaces and B2B platforms forward — and letting firms across industries gain a competitive advantage as they look to modernize legacy operations.
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