By the team at Billtrust. Billtrust were finalists in the Best SaaS Product for Business Accounting or Finance category at The 2024 SaaS Awards. They were also a finalist in the 2023/24 Cloud Awards, in the Best Cloud Payment, Finance or Billing Solution category.

In today’s highly competitive business landscape, innovation is critical to maintain a cutting-edge presence and stay ahead of competition.

However, a noteworthy and somewhat paradoxical trend is B2B businesses’ hesitation to invest in innovation in non-core business processes, especially in payments.

Despite the benefits in terms of efficiency, cost reduction and streamlined operations, “back office” functions like payments are often relegated to the background in innovation initiatives. This could stem from a variety of factors, such as resource constraints or risk aversion.

But for companies that sell to other businesses, this mantra no longer suffices. With a rocky economy elevating the need to increase competitiveness, it’s essential that businesses recognize the untapped potential of innovation in the back office. This is especially true when it comes to payment acceptance, where a string of factors are increasing the urgency to digitize.

Here are three compelling reasons why an investment in cloud payments isn’t just beneficial for B2B companies, but a strategic imperative to compete in this contemporary business landscape.

1) Your Bottom Line Needs Cloud Payments

Your bottom line is not only a reflection of your revenue but also a testament to the efficiency of your financial processes. Cloud payments emerge as a pivotal catalyst for B2B suppliers, enhancing customer satisfaction by delivering seamless experiences to today’s convenience-seeking buyers.

However, the true game-changer lies in the impact of cloud payment adoption on the financial health of businesses. Naturally, organizations’ financial health is reliant on their ability to streamline cash flow, which is concurrently dependent on how fast they get paid. In today’s ultra-competitive environment, cloud payment methods are really the only way to expedite the entire payment process and reduce days sales outstanding (DSO).

In fact, recent studies have highlighted the impact that digitization can have on a company’s bottom line. Forrester, for example, uncovered cost savings of up to $1.1 million – and a significant reduction in DSO and bad debt – for organizations using digital payment methods. Yet, the paper check remains the preferred payment method for many B2B businesses, with a third still using them to pay their bills.

2) Outdated Payment Methods Slow Cash Flow

There are several reasons why the paper check is still popular. It offers a sense of familiarity in the corporate world, where established practices are often favored over newer alternatives. Additionally, B2B transactions often involve larger amounts of money, and businesses may feel more comfortable having a tangible record of the payment process with physical checks.

But the paper check’s inefficiencies outweigh its benefits. Once an invoice is issued, it must be mailed to the customer, who then prepares and mails the physical check back to the B2B company. This entire process can take several days or even weeks depending on mailing and processing times. And with issues such as the continuous delays faced by USPS, the wait time can be even more unpredictable and extended.

Furthermore, there is an additional delay in depositing the check and waiting for it to clear. As a result, the B2B company’s cash flow is significantly slowed down. This delay can impact their ability to meet financial obligations, pay suppliers on time and invest in growth initiatives.

In contrast, embracing cloud payment methods, such as automated payment networks that allow for frictionless and straight-through payments processing, ensures a smoother cash flow for the B2B business.

In order for businesses to fully embrace digital payments, though, they first need to change buyer behavior. Educating buyers about the benefits of electronic payments, such as speed, cost-effectiveness, and enhanced security, is crucial. Offering incentives, like discounts or rewards, for businesses that switch to electronic payments can also be effective.  Providing user-friendly digital platforms and top-notch customer support for electronic transactions can also accelerate the shift away from paper checks.

3) You Can Arm Your AR Teams for Success

Accounts receivable (AR) teams are under pressure to protect their organizations’ financial health on a daily basis. They’re the ones in charge of processing every single payment received by their business, an undeniably demanding task. In today’s economy, it’s no surprise that a vast majority (83%) of C-suites recognize that their AR function has become much more important to the overall success of their business. But it’s not enough to simply recognize this. C-suites must equip their AR teams to overcome evolving complexities across the entire order-to-cash cycle.

Empowering these teams with the right tools, technology and skill sets is not just a matter of necessity – it’s a strategic imperative. Unfortunately, AR departments are amongst the most badly affected by organizations’ aversion to change. Most innovations in the payments space have been largely geared towards buyers. A good example of this is the rise in virtual cards, which aren’t streamlined for AR teams, have high interchange fees and don’t integrate neatly with ERPs or other AR platforms.

It’s time for organizations to step up and build a more efficient workplace for their AR teams. B2Bs need to play their part to fix an irrational payments ecosystem, and the way they can do so is by investing in straight-through, bi-directional payments processes and automated cash application. This will modernize AR operations and ensure a harmonious integration of technology to drive efficiency and success in a critical business payments function.

Future-Proofing Your Organization with Cloud Payments

B2B businesses must give their payments function the same amount of attention – and investment – as their core products and services. The traditional resistance to change that has characterized non-core processes must give way to a mindset that embraces innovation as a catalyst for growth, resilience and competitive advantage.

The good news is that there’s proof that investing in payments innovation can help B2Bs withstand financial pressures and emerge stronger in challenging economic conditions. By digitizing payments, businesses can critically expedite the payment process, reduce payment delays and improve  the predictability of cash inflows.

The time has come for B2B businesses to embrace innovation across their entire organization. In fact, their path to survival depends on it. It is time for B2Bs to recognize that innovation shouldn’t just be assigned to their core processes. It’s a necessity across every department for their long-term sustainability and growth.