The marriage of digital spend management to full-throated cross-border B2B payments capabilities is a match made in FinServ heaven, as the reengineering of payments pathways and partnerships after COVID is yielding potent, multifaceted new commerce solutions.
According to PYMNTS’ December 2020 Back-Office Optimization Playbook, done in collaboration with Coupa and TransferMate, “businesses’ decisions to reinvent their global B2B operations to accommodate remote workforces have ignited a wave of cross-border B2B innovations, with many developing or relying on third-party providers to enable the payment services they need to stay afloat in this digital-first environment.”
Findings that 39 percent of firms have dropped manual B2B processes for digital options since the pandemic’s onset — and that 26 percent plan to in the near term — reveal the sea change that’s occurred in back-office processes and how to better manage them.
Non-Optimized No Longer An Option
Corporates, banks and financial institutions (FIs) have decentralized systems over time, putting up data siloes and “between [enterprise resource planning], source to pay and the final execution of the invoice payment, add[ing] layers of manual inputting for AP professionals.”
That’s not ideal, clearly, and certainly not given the back-office automation available now.
As Sinead Fitzmaurice, CEO at TransferMate, told PYMNTS, “digitization efforts have certainly improved and continue to do so, but [having] the sourcing, approval and ultimate payment of the invoice within one environment provides AP professionals a platform that essentially accommodates real-time transparency into supply, demand and ultimate cash flow visibility, allowing for effective capital allocation decisions.”
Fitzmaurice added that “the new [pandemic] era of operating a non-optimized back office will affect a business’ ability to make fast decisions, which, as we have seen over the course of the pandemic, is vital, given the difficulties with traditional forecasting techniques. Those that invest in optimization will effectively manage their corporate capital and emerge from the pandemic stronger businesses as a result.”
Enterprises have been onto this for a while. In 2020, it’s small and medium-sized businesses (SMBs) that are rapidly digitizing AP/AR, manual reconciliation and other burdensome tasks.
“One report found that 93 percent of B2B SMBs are now conducting at least some of their operations online — an increase from the 90 percent that said the same in December 2019. This indicates that many of these companies are leveraging digital channels to shore up their businesses as the pandemic shifts where and how they interact with and pay their business partners and vendors,” according to the December 2020 Back-Office Optimization Playbook.
B2B Digital Automation Push Is ‘Unprecedented’
Necessity met technology when COVID arrived – and resourceful humans improvised. The result is the much-discussed digital shift and the many forms it’s taking, notably in B2B automation.
“Firms’ transitions to digital-first B2B operations have ushered in an unprecedented degree of automation. Thirty-eight percent of businesses have implemented between one and 10 automations, while 12 percent have put between 11 and 50 of them in place. Eight percent of companies have even adopted more than 50 automations for their B2B operations — twice the share that reported doing so in 2018,” per the Playbook.
Those businesses moving quickly to integrate B2B automation also expect these tech investments to pay off by paying for themselves first (across 15 months, on average).
While they’re automating the back office, more companies are turning to APIs “to integrate their payment infrastructures into their broader enterprise resource planning (ERP) systems,” the Playbook states. “Once these systems are integrated, they can be used to automate incoming and outgoing cross-border payments, eliminating the need for human intervention.”
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