Cash is king, and today, cash flow management is an imperative function for large corporations and small businesses — many of which continue to struggle with the market volatility and business disruption caused by the COVID-19 pandemic.
While optimizing back-office functions like accounts payable and accounts receivable can support enhanced cash-flow management, B2B partnership collaboration is also critical to supporting the financial health of an organization. Increasingly, that means ensuring that AR and AP departments from one business partner to the next can integrate and collaborate with each other.
This week’s look at the convergence of AR and AP examines the latest initiatives from OnPay, Xero and others to promote that connectivity.
OnPay Eases AR-AP Friction
In a recent conversation with PYMNTS’ Karen Webster, OnPay Solutions President and CEO Neal Anderson discussed how corporations can find the path of least resistance to digitizing and automating accounts payable. Preserving firms’ existing banking relationships and collaborating with FinTechs to ensure back-office integrations with enterprise resource planning (ERP) systems and other third-party platforms are important parts of this process, but keeping an eye on vendor relationships is also key.
Supporting the digitization of B2B payments via virtual card or Automated Clearing House Network (ACH), for example, introduces the new challenge of ensuring that vendors can accept those payments. Collaborating with FinTechs — to integrate the back office and supplier systems as well — can reduce friction, particularly when it comes to onboarding vendors.
“One of the most critical factors in any decision is how secure a system is,” said Anderson. “What’s really key is being able to provide full visibility into the entire process, from who’s getting paid to what dollar amounts are getting paid to how that vendor is getting paid. If a vendor makes a change and wants to be paid to a different bank account, having visibility into that change and being able to confirm it is key.”
Xero, Transferwise Team For SMB Cash Flow
Small-business accounting platform Xero is targeting cash-flow management enhancements through a recently announced partnership with global payments company Transferwise.
The integration includes short-term cash flow forecasts as well as a “snapshot” feature for SMBs to compare different cash flow periods. Further, Xero has added a Pay Through Transferwise capability that allows small businesses to pay and reconcile multiple invoices at once from the Xero portal.
While the tool highlights a more efficient accounts-payable process on the receiving end, Xero and Transferwise emphasized the importance of promoting healthy cash flow and faster B2B payments to support the financial health of small businesses. However, the tool is currently only available to U.K. customers.
AscendantFX Eases Payment Instruction Hurdles
A growing point of B2B payments friction in the cross-border transaction space lies in the management of payment instructions. In a recent announcement, AscendantFX highlighted the challenge that payers face when inputting the correct payee information, noting, “Incorrect or incomplete payee details are the most common source of costly delays when sending international payments.”
With each geographic market also having its own requirements for what information to include and how to format it, the hurdle of payment instructions continues to disrupt seamless cross-border B2B cash flows.
In response, AscendantFX launched Payee Intel to streamline how companies collect and manage payee details for bank transfers — a solution that can reduce delays and investigations launched into international payments, and ease friction for both buyer and supplier.
HighRadius Connects AR-AP For Mid-Market
Debuting its RadiusOne A/R Suite, HighRadius is targeting the middle-market with an integrated, automated accounts receivable solution designed with customers’ accounts payable operations in-mind.
In its announcement, HighRadius said the mid-market is looking for AR solutions that can support teams working remotely with enhanced functionality including “eInvoicing” and cash reconciliation.
With a focus on suppliers’ corporate customers, the tool also integrates a credit risk solution.
“We launched the RadiusOne B2B Network to facilitate suppliers and AR teams to digitally connect with their buyers and AP teams for faster processing of receivables and payments,” said HighRadius founder and CEO Sashi Narahari in a statement, adding, “The RadiusOne AR Suite will provide the essential apps for AR teams at mid-sized businesses to instantly plug their ERPs and AR processes into this network and digitally connect with their buyers across the globe.”