47% of SMBs Say Lack of AR Transparency Hinders Operations

Being able to receive B2B payments quickly and easily is vital to businesses’ financial health, but many small businesses face friction with receiving them.

The most common problems that small- to medium-sized businesses (SMBs) face when receiving B2B payments include a lack of foresight into when their payments will be received, lengthy approval processes, and low levels of integration into their other systems.

The study “The AP/AR Quick-Start Guide: Reducing B2B Payments Friction for SMBs” is a PYMNTS and Plastiq collaboration based on a survey of 500 SMBs in the consumer goods manufacturing, eCommerce and retail, transportation, logistics or shipping and wholesale trade sectors, and an additional survey of 100 executives at business payment platforms.

Focusing on the accounts receivable (AR) side, the study found that “SMB suppliers identified four pain points, on average, in receiving payments. Their top issues include the lack of transparency about when payees will receive payments, identified by 47%, the length of invoice approval processes, cited by 44%, the lack of integration with other systems, cited by 39%, and the length of time before receipt of payment, cited by 38%.”

SMB payors, meanwhile, listed five issues they typically encounter when making B2B payments, with 45% pointing to the need for manual reviews, followed by the high cost of using credit, cited by 43%, the high cost of making payments, cited by 41%, time-consuming processes, cited by 35%, and lack of financing options, cited by 35%.

A key point of the study is the willingness of SMBs to pay to receive funds faster and with more certainty. On that count, 67% said they would be at least somewhat likely to pay for an all-in-one platform if transaction fees were 1% of the processed payment amount, and 41% indicated this even if fees increased to 2%.

Going a step further, the study stated that “SMBs and payments executives are on the same page when it comes to transaction fees” as 97% of the executives surveyed said that charging 1% of transactions for using an all-in-one solution would be very or extremely appealing to SMBs, and 60% said it would still be highly attractive if the fees increased to 2%. This drops off to just 23% with 3% fees, however.

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