How to Automate B2B Payments

For any accounts payable (AP) workers or management who’ve finally had enough of writing checks or manually processing wire transfers, good news: the accounting world is long past the point where these are the only options for paying vendor bills.

Today, it’s possible to make business-to-business, or B2B payments processes straightforward and easy to reconcile. Companies that automate their payment operations can enjoy increased productivity, lower invoice processing costs, and much more.

Join us as we explore the shift to B2B payments automation, how B2B payment platforms are helping businesses gain control over payment processes, and why the optional Stampli Direct Pay service is a great compliment to invoice processing by providing maximum payment flexibility.

3 Reasons B2B Payment Methods are Changing

Any number of different factors help explain why the B2B payment landscape is currently in the midst of a profound shift.

Some reasons are longstanding, such as the digitization of offices in recent decades and a significant increase in mobile and cloud computing in the past 10 years. Other reasons are currently unfolding, such as the continuing effects of the COVID-19 pandemic. It’s also become apparent that significant opportunities exist in the B2B payment market, with Mastercard estimating in its Business Payments 2022 whitepaper “that the current global business payments market exceeds $100 trillion, encompassing all forms of payment.”

Through all the different factors, a common thread is that accounts payable clerks simply no longer need to be physically in the office with stacks of paper invoices and paper trays in front of them. Here are a few reasons to automate B2B payments.

1. Recoup Time & Resources by Automating Data Entry

Whenever an accounts payable clerk receives an invoice, the first thing they must do to prepare it for payment is to enter it into their company’s accounting system. And when done manually, this essential function becomes prone to mistakes from data entry errors to misplacing invoices to paying duplicates.

In short, data entry is a repetitive task that accounts payable probably doesn’t like, given that their time and resources can be more focused on other AP functions which can yield more value. As one tech CEO wrote, “The error-prone data entry happening at the start of the invoice processing workflow can further lead to possible mistakes such as paying the same invoice twice, paying incorrect amounts, duplication of invoices.”

On the other hand, automation software can use character recognition tools to populate B2B payment information from invoices automatically into accounting systems. In result, eliminating data entry errors and no more misplaced invoices.

2. Check Payments are Painless with Automation

In July, the National Automated Clearing House Association (NACHA) President and CEO Jane Larimer confirmed what shouldn’t be that surprising amidst a global pandemic: Check use is down, with conversion of paper checks into automated clearing house, or ACH payments dropping 24 percent from between the second quarters of 2019 and 2020, with check conversion volume at point sale falling 45 percent.

“One thing many people have discovered is that paying with paper is a big pain point—especially under the constraints of social distancing—whereas paying electronically, including by ACH, is really very easy,” Larimer wrote.

Even then, there are businesses and vendors which still prefer paper checks. What can accounts payable do? The best option for these groups would be to identify check payment solutions which are both painless and touchless. For example, solutions like Stampli will automatically print and mail physical checks from your bank account, all the while using your own electronic signature which will make its way onto the check.

3. Payment Automation Provides Control During Stressful Times

It’s tough times for everyone right now thanks to COVID-19. In a recent survey of 500 finance management and executives, 66 percent admitted having higher stress levels, while 60 percent noted they’d worked longer hours, suffered stress-related insomnia, or had their sleep interrupted by work.

Stress often comes from a lack of control or knowing what’s next in these uncertain times. While payment automation can’t help you navigate COVID-19 or curb all types of stress, payment automation can streamline processes so you can control how and when payments are made to better ensure business continuity.

By removing the bottlenecks from manual payment processes, B2B payment automation provides complete control and visibility of payment processes to help businesses control when payments are made. With the removal of paper, payment processes are streamlined and gives businesses the opportunity to take advantage of early payment discounts.

Then consider how payments are made. Since payment automation saves both resources and time, this gives businesses more time to decide how they’d like to pay if it’s through check, ACH, wire, or even card depending on rewards.

How B2B ePayment Systems Operate

Now that we have an idea of some of the reasons to automate B2B payments, let’s look at how the B2B payment systems operate.

Streamlined Payment Processes

It can take close to a month to get an invoice approval and issue payment when manually processing an invoice. Part of the reason for this is the intense number of steps required to process an invoice by hand. From waiting on a physical copy of an invoice in the mail to trudging to a file room to find purchase orders and receipt reports for three-way matching, to chasing down hard-to-catch approvers for signatures; the manual invoice processing journey can sometimes seem never-ending.

On the other hand, the automated payment process moves much more briskly, with Goldman Sachs estimating that automation can save 70 to 80 percent of time for accounts payable staff. Meanwhile, Stampli has found that its SaaS payments automation service can lead to approvals as much as five times faster.

The automated process is quicker because, among other things, invoices are processed electronically (or by mail, then scanned). Then three-way matching is easy with invoice tracking software since they can pull open purchase orders from a financial system and each invoice can include document attachments for reference. Moreover, approval workflows suggest the appropriate approvers based on the organizations processes. What would normally take weeks or even months when done manually can be done in a matter of days.

Quicker payment processes, of course, save companies time and money, with B2B payment automation systems able to justify the costs given the recouped resources and time. They also lead to happier contractors and vendors, and a greater possibility of them agreeing to vital but sometimes-elusive early payment discounts, since they’re getting paid sooner.

What Best-in-Breed Systems Do

Pretty much any accounts payable automation software is an improvement over manual paper invoice processes. But as American Express pointed out, not every solution is comprehensive and “that those who are the most technologically advanced offer solutions with the broadest functional scope.” This doesn’t mean it’s not possible to have a comprehensive solution, but consider solutions that are dedicated to invoice processing with maximum payment flexibility.

Here’s a thorough list of functions that best-in-breed systems should include:

• Intelligent character recognition;
• Advanced artificial intelligence, or AI that identifies patterns;
• Conversion of invoice and payment data to your accounting codes;
• Payment delivery on scheduled dates, with invoice approvals and automated notifications;
• Variety of payment methods and payment flexibility to pay outside the system.

B2B Payment Automation Challenges to Note

Another challenge is subtler. Simply, this marketplace is getting crowded with cloud-based providers who each promise the sun and the moon to accounting departments. It can be hard for decision-makers to get through the clutter and determine who’s merely talking a good game and who has the wherewithal to ensure a smooth implementation. That said, there are some things to look for, as we’ll explore in a moment.

Why to Choose Stampli to Automate Your B2B Payments

Many accounts payable automation solution providers are out there. Here’s why Stampli is in the top tier.

Stampli Direct Pay is Payment Agnostic

While it’s true that the B2B payment world is changing, far too many B2B payment businesses offer limited payment methods in the product and force you to finish the last leg of invoice processing, being payments, within their system.

For example, payment providers will offer AP departments rebates, but the payment provider will push virtual credit cards on their vendors, which is a conflict of interest. Meaning, in order to grow revenue, payment providers must convince your vendors to accept virtual cards (often called e-payments) where vendors foot the 3.5 percent card transaction fee.

With Stampli Direct Pay, our goal is not to push any particular payment method. Our goal is to make your entire payment process easy, from approving payments to reconciliation. We’re agnostic toward which payment provider you use. You can use Stampli Direct Pay to pay vendors by ACH, painless paperless checks, or outside Stampli with the payment provider of your choice. Stampli provides value by making the accounts payable process digital, automated, and collaborative. Payments are optional, for your convenience.  

Invoice Processing with Payments for Added Convenience

It’s not just payment agnostic features that make Stampli a highly-flexible AP automation solution. Stampli makes your invoice processes easier and offers the optional Stampli Direct Pay feature for your added convenience. Some of Stampli’s features include:

• Being the only end-to-end accounts payable automation system that offers AP teams full control of the invoice lifecycle, empowering them to communicate better with other internal departments and their vendors;

• Capturing and code features, such as an intelligent accounts payable bot, Billy, that can extract invoice information, flag duplicates, and provide coding and approval routing assistance;

• Approval and authorization features, including support for multiple invoice and payment approvals by account;

• Stampli Direct Pay is optional. B2B payments and reconciliation are straightforward, with flexibility to pay outside of Stampli, by check, or make one-to-one ACH payments that are easy to reconcile. Then on your bank statement, you’ll see one transaction with the name of the payee and your vendor will see one transaction with your company name.

Painless Setup and Configuration

Some accounts payable payment automation service providers might claim they’ll need months to get their system implemented for a company. This isn’t Stampli.

With Stampli, its B2B payments automation solution can be up and running in a matter of days. Stampli’s intuitive, easy-to-use interface can welcome even novice users into the fold, with support available from Stampli’s award-winning customer success team. Companies can also keep their existing systems and process flows, to minimize disruptions to accounting staff.

Whether a company chooses to go with Stampli or someone else, one thing’s clear: In the year 2020, it’s high time that businesses ditch old, inefficient means of payment processing and start enjoying the benefits of automation.

Want to automate your company’s payments and aren’t sure where to start? Check out Stampli’s free, no-registration-required Payment Automation Field Guide.