55% of Finance Officials Say Billing Disputes are Among Their Greatest Challenges

As FinTechs, banks and corporates work to develop new financial solutions to address B2B pain points, banking-as-a-service (BaaS) has gained traction, as it allows banking and financial services to be deployed rapidly.

One of those pain points is invoicing. Many corporate finance and treasury officials would probably attest that B2B invoicing processes are among the most wasteful and burdensome aspects of their departments.

In fact, 55% of finance officials say billing disputes are among their greatest challenges, according to the Banking As A Service Playbook, a PYMNTS collaboration with Transcard.

Billing Errors, Disputes and Late Payments

Ninety-four percent of company finance officials say they must manually input at least some invoice or billing information. This can lead to billing errors, disputes and late payments as well as wasted employees’ work hours. Nearly every respondent in the survey said that disputes contribute to late payments.

To escape from these legacy payment processes that collectively cost them billions in dollars in waste, businesses are increasingly able to take matters into their own hands and implement mission-specific digital payment and banking solutions. These include automated accounts receivable (AR) platforms that can make the process of billing, collecting and account reconciliation a seamless function of a firm’s enterprise resource planning (ERP) system.

Implementing such end-to-end solutions once would have been a multiyear process for businesses, requiring them to establish multiple banking relationships and integrate their products across a number of ERP applications and business units, all while requiring considerable changes to their existing infrastructure and onerous security and compliance measures.

Turning the Process on its Head

BaaS models are turning the process of delivering banking services on its head. BaaS uses application programming interfaces (APIs), cloud-based systems and advanced artificial intelligence (AI) and machine learning (ML) technologies to make it easier for businesses and FinTechs to develop capabilities for sending and receiving payments as well as managing bank data.

These models serve as an important framework for relationships between banks that want to maintain and add value to their corporate customers, FinTechs with solutions that address specific inefficiencies and corporations that want to use payments and financial services to improve the value they provide to their end users.

“There’s no reason banking-as-a-service platforms can’t complement and sit side by side with an existing core platform, because BaaS platforms that are specialized are not trying to take over all functions and features of traditional core applications,” Transcard CEO Greg Bloh told PYMNTS. “Sitting side by side is super important from an FI’s perspective — they’re looking for a partner that will complement and align with their offerings.”

As lines between the physical and digital worlds blur and the ability to create and launch digital-first solutions becomes key to competitive advantage for both banks and corporations, BaaS models support the creation of innovative payments ecosystems and the implementation of automated platforms that address B2B pain points.