A new report shows that most companies need improvement on business-to-business (B2B) payment processes, and that most are also using manual processes for accounts payable and receivable.
The report, Strategic B2B Payments in the Digital Age, was commissioned by the Financial Education & Research Foundation (FERF), the independent non-profit research affiliate of Financial Executives International (FEI).
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The report examines the current landscape of B2B payment processes, identifying key pain points facing corporations and highlighting how innovative organizations are evolving their payment systems for digital competitiveness. The research examines payment process structures, the interplay between finance teams and these systems, and provides a framework of best practices to transform payment operations into a strategic asset. The report was produced in partnership with Boost Payment Solutions, a recognized leader in global B2B payments.
“Payments are the lifeblood of any business,” said Andrej Suskavcevic, CAE, President and CEO of Financial Executives International and Financial Education & Research Foundation. “That’s why it’s essential for companies to align their payments strategy with overall corporate objectives, unlocking advantages such as greater efficiency, faster execution, and improved decision-making.”
Key Highlights Include:
The State of B2B Payments
- 78% of companies reported that the B2B payment processes could be improved.
- 70% of respondents indicated the B2B AP processes were at least half manually operated, and almost 70% for AR.
- 51% of B2B payments were made via ACH/Bank transfer, followed by checks (22%), wire transfers (13%), static commercial cards (8%), virtual commercial cards (3%), and other (2%).
Framework for Improvement for Digital Environment
- 64% are interested in automating AP processes further.
- 80% of companies with the most significant need to address B2B payment processes are unable to, citing budget concerns, insufficient executive buy-in, and other priorities.
Best Practices
- Convert legacy methods to digital payment methods — 26% of all payments at smaller companies are made via check.
- Increase automation across the B2B payment process — 60% of AR teams cited delayed or missing remittance details as the number one pain point.
- Fully consider the total costs and benefits of a payment method — 59% of companies cite cost of acceptance as the most significant concern when accepting B2B payments, but don’t consider DSO and other key impacts on cash flow.
“When it comes to payment methods, especially in B2B, not all options are created equal,” said Dean M. Leavitt, Founder and CEO of Boost Payment Solutions. “This report underscores the need for companies to work with a bold, vigilant, and strategic B2B payments partner that understands the business challenges organizations face and can deliver digital solutions purpose-built to drive efficiency, resiliency, and growth.”
The full report is at FEI Member Portal > Shop > Product Catalog > Product Details.
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