Jun 28, 2017 Byron Biggins
Disclaimer: I will be taking this satirical analogy way too far. You have been warned.
For millions of years (OK, maybe hundreds) businesses have paid their suppliers using paper checks—an improvement over payment methods like gold, silver, and coins. But in the past decade, there has been a major step in the evolution of B2B payments, namely electronic payments.
Unfortunately, most businesses are still stuck in the chimpanzee-phase of writing paper checks. The reasons for this range from inertia to being unaware of better payment options to the fear that change is difficult and time consuming.
Some of the more evolved companies have made it as far as the Homo erectus stage—using a mixture of paper checks and electronic payments (EFT/ACH, wire, and card), usually offered by their banks.
Unfortunately for these organizations, these financial services have created more work for accounts payable departments. They now have multiple processes for paying suppliers, multiple reconciliation methods, and they are required to capture and manage the data around how their suppliers want to be paid. Like the Homo erectus, I believe this approach will eventually become extinct.
Created by Ryan Mason
If you envision a fully evolved (Homo sapiens) solution for an AP department, it will look like this:
- Simply select all invoices that are ready to pay and click an approve button to pay them.
- The payment type is optimized based on what the supplier will accept without the AP department having to do the work of collecting and managing the sensitive banking data.
- The AP team does not have to follow up with suppliers on unsettled corporate payments or answer payment-related questions from suppliers.
- Payments are made to international suppliers in the same process as the other payment transactions—at a lower cost than banks charge and with full visibility of when the funds arrive.
- Minimal effort is required to implement the payment partner's solution. Data security is guaranteed, providing peace of mind for customers' finance and IT teams.
- The payment service would more than pay for itself with cost savings and even generate revenue for an AP department through credit card rebates.
Luckily, we have now arrived at the age of the Homo sapiens payment solutions. Payment companies that specialize in AP and business-to-business payments processing can adapt to your needs in real-time—from flagging duplicate invoices to updating supplier information. If your company has not fully completed the evolution in how you make business payments, it is time to evolve your B2B payments.