By Nancy Sansom

For too long, the B2B invoice to cash cycle has been a transactional and poor customer experience. An invoice is entered in a system and a payment is made on the other side, if you’re lucky. Throw in disputes, lost invoices, daily distractions, and more, and there is a series of ships passing in the dark moments that drag on for far too long. Both you and your customers are frustrated, and vital cash is tied up.

COVID exposed the flaws of the B2B payments cycle and perhaps accelerated the digitization of the AR department by a decade or more. Necessity is the mother of invention, after all. However, for most businesses, digitization has boiled down to sending electronic invoices and automating existing systems.

What hasn’t been fixed is the disconnect between the buyer and the supplier. At Versapay, we refer to that as the AR disconnect. The canyon of broken communication, misunderstanding, and frustration that your customers face when trying to do something as “simple” as pay you.
So, while a digitized AR department might be more efficient, the experience for customers has gotten arguably less human and more frustrating. Clearly there is a need to solve both for the automation and digitization of AR, as well as for a better and more collaborative customer experience.

At Versapay, a leading accounts receivable (AR) automation company, we’ve witnessed firsthand several trends illustrating this fact.

TREND 1: Business transactions happen from anywhere
While paper cheques have long been a primary target for digital transformation, they have remained stubbornly in the business payment lifecycle. In fact, many clients have told us that prior to working with Versapay they found it easier to process a cheque than to receive an electronic payment.

Why is that? It’s much easier to match the remittance data of a paper invoice stub mailed in with a check, where all the data is on hand, than a naked sum of electronic money with no data.

Yet, COVID tapped into latent demand for digital payments in businesses with more complicated business and payment transactions. Many companies have told employees, “You never need to go back to the office if you don’t want to. You can conduct business wherever you feel comfortable.” Faced with the alternative, stacks of checks in empty offices, businesses have no choice but to make the digital move to B2B payments. To make this shift as efficient as possible, you need technology that not only automates your processes but also fosters collaboration between you and your customer in order to make the process seamless and delightful.

The old way of doing B2B payments is quickly being replaced by a collaborative AR network that enables your employees to manage business transactions from anywhere—accessing real-time account information, accepting all forms of payment (including digital), tracking history, and completing all the accounting work their companies require.

TREND 2: Customers and employees expect tools that make collaboration easier
In nearly every area of the enterprise, cloud-based tools such as Salesforce, Google Docs and Slack have made it easier than ever for teams to collaborate internally and with customers. However, the AR department lags behind.

As more businesses introduce technologies into their accounting processes, the temptation is to simply automate the way things have always been done — what we call traditional AR automation. But while transformation is the hot word of the day, the truth is that companies have a clear opportunity to empower the genius of their AR team by making it easier than ever for them to do their jobs and serve your customers.

When your customers get an invoice, often they’re simply not ready to pay it. They may not understand the details. They may see that a promised discount was not properly applied, or something in the invoice was never delivered. Bottom line: they have questions. Traditionally, this would be the start of a painful and drawn-out exchange with

This was always a problem, but COVID massively accelerated the pain. Suddenly businesses were forced to pay attention to both sides of the B2B transaction to streamline experiences between customers and the business. There hasn’t been an AR automation solution that reimagines the buyer and seller experience with all the of collaboration features we’ve come to expect from modern cloud-based apps, until recently.

What we seek to do with the Versapay Collaborative AR Network is to enable both buyers and suppliers to work together in a user interface that’s as easy to use as the leading cloud-based apps out there — such as Google Docs. Questions get asked and answered, almost as if you were in the room together. Ask about a discount, and the sales team can pipe in and confirm that it was missed on the invoice and get it corrected. Issues get resolved faster and easier, and relationships are built, not broken. The result is increases in efficiency and acceleration of your cash flow, certainly, but also much happier customers. And let’s face it, that’s the backbone of a healthy company.

TREND 3: The era of cheap capital and low inflation is ending
In today’s constrained landscape — high inflation, rising interest rates, constricted supply chains — cash flow is king and businesses need to get paid faster. We believe wholeheartedly that increased collaboration between suppliers and buyers enables this.

We’re already seeing the first step towards this — CRM vendors like Salesforce and their partners have done an excellent job of helping companies recognize the importance of collaborating beyond their four walls to accelerate the sales cycle.

As more widespread adoption of collaboration tools takes AR automation a step further, this will facilitate true collaborative commerce by allowing businesses to connect with partners both inside and outside their companies to swiftly resolve disputes, answer questions, and move the payment cycle along in a crisp manner. As more buyers and sellers work together across this network, their collaboration will strengthen and expand the value of the network with more efficiency and robust information. This will be a major strength in the constrained global economy especially as it will accelerate cash flow.

TREND 4: The birth of the network of networks
There have always been marketplaces where buyers and sellers come together to do business offline. Pre-pandemic, we called them trade shows, but as commerce has moved online, the trade show environment has too. There are also many consumer examples, such as Facebook Marketplace, which connect individual buyers and sellers with each other.

Collaborative commerce is similar, only with businesses rather than individuals, and over time I think it’s going to become more common. Rather than a single marketplace, however, I expect we’ll start seeing a network of marketplaces (a network of networks if you will) that allows buyers and sellers to log in and transact with each other using their system of choice. Individuals in the sales, customer service, or AP and AR departments will be able to collaborate and see what their peers have said and done for a given buyer or seller – features that we’re used to seeing as consumers on social or cloud-based apps, translated to the B2B environment.

Businesses will benefit from this network effect with streamlined communication where suppliers can register and maintain their information within the portal and compete for business without any heavy administration by a finance team. This will make it easier to connect with suppliers every time there is an item that requires action e.g. a questionnaire, contract etc. It will also help businesses lower costs and create greater loyalty across the buyers and other suppliers in the network.

All of this will, again, be enabled by technology that allows real-time collaboration — between buyers, suppliers, and partners. That will mean open and robust APIs and strong relationships between vendors and developers.

It’s not too late to prepare

Given the collaborative trajectory of B2B commerce, the simple question is how prepared are you for this future? The good news is you’re not the only one asking this question. Most finance leaders are at the front end of their digitization journey, and now is the perfect time to shift the focus from traditional automation to true transformation that sets you and your customers up for success in the era of collaborative commerce.

Nancy Sansom is the Chief Marketing Officer of Versapay.

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