One-Third of Small Businesses Plan to Automate Accounts Receivables by 2025

B2B customers increasingly expect to be able to use the same payment methods they prefer in the B2C realm, and some suppliers are struggling to accommodate that. Small- to medium-sized businesses (SMBs) in particular are having difficulties.

As they search for solutions, many are finding automation and flexible payment tools can help. In fact, 34% of SMBs are prioritizing investment in automated receivables over the next three years, according to the Optimizing SMB Payments Report, a PYMNTS and American Express collaboration.

“Easy-to-use payment experiences can help SMBs in a ton of ways,” American Express Executive Vice President of Global Commercial Payments Dean Henry told PYMNTS.

More Companies Are Heading Online

Online shopping has boomed since the spring of 2020, with consumers paying bills and making retail purchases digitally in higher figures. This preference for digital shopping and payments appears to be expanding outside of the B2C world, with more companies heading online to begin their sales relationships with new vendors or suppliers, as well as manage their payments.

One of the key factors motivating this appears to be that many of those making B2B purchasing decisions at their firms are already accustomed to having seamless digital customer experiences in other areas of their lives.

Companies looking to switch to digital-first B2B processes to meet these new customer preferences, though, still face challenges. Payment collection is a particular problem for SMBs digitizing their processes, with over 60% reporting that they routinely have their invoice paid late and 16% stating that receiving payments can take more than a month.

Making It More Straightforward

Automation can address these issues by allowing business to manage collections instantly. Henry told PYMNTS that automated accounts payable (AP) and accounts receivable (AR) solutions are areas where American Express is focusing.

“These are easily integrated in the businesses’ accounting systems, making it more straightforward to manage supplier payments and cash flow; increasing visibility into up-to-date information on accounts, invoices and payments; and reducing manual reconciliation and errors,” Henry said.

PYMNTS data found that firms with highly automated AR processes take far less time to follow up on late payments. B2B firms are also beginning to understand the importance of accepting credit card payments as it gives buyers access to a preferred payment methods and helps them expand their businesses. Sellers, on the other hand, get a better handle on their cash flows by gaining faster access to their payments.

As Henry said of the automated AP and AR solutions: “These types of payment improvements are invaluable when it comes to both the day-to-day and the big-picture management of financials for SMBs.”