How B2B Payments Automation Can Help Real Estate Businesses Pay Vendors Quickly and Accurately

B2B payments are the lifeblood of many industries, ensuring the steady flow of goods and services between vendors and clients. However, these payments’ ubiquity can obscure their complexity, as errors, delays and other complications can run rampant without countless hours of diligent accounting work.

The need for timely and accurate B2B payments and accounts payable (AP) processes is especially pronounced in the real estate industry, as construction companies, contractors, equipment suppliers and numerous other parties must be paid before properties can be sold. Real estate consulting firm Atlas Global Advisors is well-versed in these challenges, according to executive managing director Anthony Nazzaro.

“It’s a given to me that folks need to manage their cash flow,” Nazzaro said in an interview with PYMNTS. “And if somebody is not saying that, then there’s a real problem with their company.”

Nazzaro recently spoke to PYMNTS about how a reliance on paper payments can complicate vendor relationships and how artificial intelligence (AI) and automation can substantially ease the B2B payments process.

Challenges and Consequences in B2B Payments

Nazzaro said that in the real estate industry, the biggest challenge in quick and accurate B2B payments is that vendors often lack digital or electronic payment methods. These payments can be stalled because firms are forced to wait for paper checks in the mail, and also because businesses lack the capacity to quickly resolve problems that crop up due to paper-based systems’ inefficiencies.

“Even today, a lot of the vendors are not sophisticated enough to enable electronic payments, especially the mom and pops out there,” he said. “You need to get them to be electronic because they can’t just be throwing bodies at the volume of work that comes through. They need something that’s more automated and controlled so that they can handle their cash flow.”

These traditional B2B payments and errors can have dire consequences, Nazzaro warned. Amicable vendor–customer relationships are crucial in the real estate industry, and companies that have a history of late or inaccurate payments can suffer by receiving slower or lower-quality service.

“If you’re waiting for someone to come and fix something or do some maintenance or come and complete a project, they’ll put you in a queue at a higher level if you’re a better client,” Nazzaro said. “There’s a big hit to the daily operations if you don’t pay your vendors in a timely manner and if you don’t pay them fairly.”

Electronic payments and automation are critical to ensuring vendor payments are on time and in the proper order, he explained. The best solutions leverage AI to dynamically examine data and develop payment plans based on companies’ needs.

Solutions to B2B Payment Complications

Nazzaro believes that the most effective way to accelerate and improve B2B payments is to utilize automated systems and electronic payment methods than can minimize the potential for delays or human errors. The exact type of solution can vary depending on the type of company using it, but treasury management and enterprise resource planning (ERP) solutions are a good start.

“I believe that pure automation of what I would call task-level work is probably one of the best places to start,” Nazzaro said. “There’s some overlap between the treasury management solutions and the ERPs, but generally speaking, if you just design them properly, you can get the benefit of both of those.”

He said that AI-aided solutions can also greatly benefit accounting departments. These systems can automatically analyze payments data and determine the most effective area of automation.

“These AI tools can actually learn by taking data and scenarios and the outcomes of how someone actually interacted with data, and then [they can] to create automation based on that,” Nazzaro explained.

Old-fashioned B2B payment methods like paper checks are steadily being supplanted by solutions that leverage advanced automation, but many firms still find it hard to cut ties with legacy payment methods. However, the sooner they augment or update their existing processes, the sooner they can ease the account process for parties on both sides of the transaction.