40% of Companies Cite Late Payments as Primary Invoicing Headaches

Automating accounts receivable (AR) and accounts payable (AP) processes through enterprise resource planning (ERP) solutions has become the gold standard for companies seeking to streamline operations and cut down on manual tasks and errors.

But there’s a missing piece to the equation, according to “Next-Gen Commercial Banking,” a PYMNTS and FISPAN collaboration: banking integration.  

Get the report: Next-Gen Commercial Banking 

While ERP platforms can help firms produce invoices and execute payments, employees must typically still log in to bank portals or visit bank branches to reconcile and fulfill payments. 

With 40% of companies naming an inability to validate invoices as the reason for late payments, the consensus is growing that companies need not only ERP solutions but also banking integration within these systems. 

Developing Fully Integrated Systems 

To meet this demand, digital AR and AP technology providers offer embedded banking solutions that can easily integrate with existing business software. The resulting systems can automatically send and receive payments and apply them to invoices to expedite reconciliations, boost efficiency, streamline cash management and offer better customer experience. 

“Banks, payment providers and FinTech companies are starting to move toward collaboration to launch services and solutions with the goal of making life easier and removing the technical burden for businesses of all sizes,” FISPAN co-founder and CEO Clayton Weir wrote in a PYMNTS eBook in January. 

Read more: FISPAN: 2021 was the Year of Renaissance 

“The groundwork has now been laid to make finance embedded in a more standardized way, and initiatives like open banking will help unlock financial data for businesses,” Weir wrote. “By connecting the back-end tools and services that businesses use — such as electronic payments rails — digital B2B commerce will become an invisible part of life.” 

Meeting the Challenge of Digitization 

While the consensus on AP automation’s benefits is growing, many firms find digitization challenging, particularly smaller businesses. Some 60% of chief financial officers (CFOs) in a PYMNTS survey said they question the technical expertise of their in-house staff to support too much digitization, and nearly half said they were concerned about not having fully integrated ERP platforms. Cost was another concern for 37% of those surveyed. 

Trust in technology also remains a hurdle, especially as ERP systems move more and more to the cloud. One in three companies distrusts the cloud, according to one report, insisting on keeping certain functions on-premises rather than investing in cloud options.