Contracting and payment processes are notorious for being cumbersome, time-consuming and often riddled with inefficiencies. From the initiation of a contract to the final payment, businesses frequently find themselves mired in layers of friction that slow down operations and hinder cash flow.

Whether you’re a small, medium or large enterprise, the pain points associated with these processes are universally felt.

“At the end of every signature, almost always, someone has to pay someone money,” Marty Ringlein, co-founder of Agree.com, told PYMNTS CEO Karen Webster during a conversation with co-founder Will Hubbard.

Despite this inevitable connection between signing contracts and making payments, the two processes often exist in disjointed, disconnected silos, Ringlein added. This separation leads to friction, delays and inefficiencies — problems that are not only frustrating, but also detrimental to business growth and efficiency.

“It’s back and forth over email, Word docs, PDFs, then you switch over to totally different software … eventually, things start to slip through the cracks,” explained Hubbard. “To go from send, to sign, to get paid all in one platform is meaningful, particularly to mid-market groups, companies doing six to seven figures in revenue.”

Streamlining the Process With Contracting and Payment Processes

One particularly problematic scenario that Ringlein highlighted involves investment agreements. After signing a SAFE agreement to invest in a company, investors are often left chasing confirmation of the transaction, with funds seemingly disappearing into the ether.

The root of the problem lies in the fact that most businesses use separate, often outdated, systems for each step in the process. Ringlein noted that automated accounts receivable (AR) and accounts payable (AP) systems, which should ideally be able to communicate and trigger actions like payment confirmations, are often not connected. This disconnect forces businesses to rely on manual processes, further exacerbating delays and inefficiencies.

“There’s so much unnecessary back and forth, a lot of steps simply to get somebody paid,” Ringlein said.

He and Hubbard noted that their platform’s approach to solving these issues relies on understanding every detail of a contract — down to the comma placement and payment terms. By doing so, the platform can automatically generate an invoice as soon as the contract is fully executed. This invoice can then be sent along with the signed agreement, complete with a secure payment link, allowing the entire process to be managed end-to-end in one seamless thread.

The solution primarily targets the mid-market segment, which itself includes a diverse range of businesses, from independent contractors and small- to medium-sized businesses (SMBs) to B2B software companies. These businesses are often characterized by their reliance on contracts for revenue generation and their need to streamline operations to maintain competitiveness. Agree aims to replace the patchwork of tools currently in use, while also integrating with existing platforms where necessary.

“A lot of these legacy eSignature players, they mostly go after the sender,” explained Ringlein. “So, in this case, a sales rep, but legal wants eyeballs into what’s being changed on a document. Finance obviously wants eyeballs into what’s happening. So, this is a collaborative place where those three siloed teams for the first time come together around the contract.”

Addressing Scalability and Overcoming Adoption Barriers

One of the challenges Agree faces is ensuring that mid-market businesses are ready to embrace and integrate its solution. However, the founders said the response so far has been positive. Hubbard shared an anecdote from a conference where business owners cheered at the prospect of no longer having to pay for Docusign, reflecting the eagerness of many businesses to adopt a more integrated and cost-effective solution.

And while the initial focus is on mid-market businesses, Agree has plans to move upmarket in the future, offering enterprise-grade features to larger companies. The platform’s ability to integrate multiple layers of the contracting and payment process, including assigning different roles for signing and paying, makes it particularly appealing to businesses with more complex workflows.

Ringlein and Hubbard said they also see potential in specific industries that have been slower to modernize, such as interior design and wedding photography. These sectors, characterized by their reliance on analog processes and the need for fast, secure payments, stand to benefit from Agree’s solution. By increasing what Ringlein referred to as “signature velocity,” Agree works to help ensure that both parties are incentivized to move the process forward quickly, benefiting everyone involved.

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When faced with the choice between being buried in mounting piles of invoices or embracing the streamlined benefits of paperless processes, many organizations frequently choose to do nothing — preferring instead to struggle with outdated, manual AR processes that not only hinder cash flow but also stifle growth and innovation.

“If I had to boil it down to two words, it’s ‘competitive advantage,’” Aaron LeHew, director of invoice-to-cash at Esker, told PYMNTS about embracing AR digitization and automation.

“Organizations with well-oiled AR processes can rely on their own liquidity, reducing the need to tap into external financing,” he added. “This allows them to invest in growth initiatives and other strategic priorities.”

In today’s dynamic macro backdrop, cash flow is the lifeblood of any business, and the efficiency of an AR process is directly tied to a company’s financial health and growth potential.

At the same time, beyond financial benefits, a streamlined AR process can enhance customer and employee satisfaction.

LeHew noted that 21st century business customers increasingly demand transparency, flexibility and ease of doing business. Simultaneously, their employees seek meaningful work and opportunities for growth — not just manual and repetitive tasks that sink them in drudgery.

Automation in AR processes can address both needs, helping contribute to long-term business success.

Read also: The High Cost of Manual AR Processes and What to Do About It

The Impact of Outdated AR Processes Shouldn’t Be Overlooked

When examining the current state of AR programs, particularly within larger enterprises, LeHew said he has observed an ongoing shift toward more strategic roles and responsibilities.

“There’s a greater emphasis on continuous improvement and tracking the customer’s journey,” he explained. “Organizations are identifying gaps and addressing them to remain competitive.”

However, despite these advancements, many AR programs still rely on manual processes, which can lead to inefficiencies and bottlenecks.

“As workloads increase, the issues with manual processes are exacerbated,” LeHew said. “Without the ability to add headcount at the pace of growth, companies risk falling behind.”

Outdated AR processes can have far-reaching negative impacts on a business.

“When AR processes are outdated, organizations may struggle with delayed payments, cash flow issues and an inability to meet working capital needs,” LeHew explained. “This can force companies to rely on external financing, which is not always ideal.”

Moreover, manual AR processes often involve repetitive, mundane tasks that can sap employee morale and productivity.

“Employees may spend a significant portion of their day trying to determine what tasks to prioritize, rather than focusing on higher-value activities,” LeHew said. “This can lead to a black hole of activities that aren’t being tracked or managed effectively.”

See also: Payments Speed and Security Acceleration Driven by Behavioral Expectations

The Strategic Importance of Efficient AR Processes

Automation offers a solution to the challenges posed by manual AR processes. By using digital tools and technologies, organizations can streamline AR operations, improve cash flow visibility, and enhance both customer and employee experiences.

“Automation can help organizations stay in front of customers, ensuring timely payments and addressing any issues that arise,” LeHew said. “It also provides employees with clear priorities, allowing them to focus on high-priority tasks rather than mundane, repetitive work.”

Despite the clear benefits of automation, however, many organizations are hesitant to embrace it. LeHew pointed out that this hesitation often stems from a resistance to change, particularly among employees who may fear the disruption that automation could bring.

“Change is hard, and some people resist it because it impacts their world,” LeHew said. “It’s important to openly discuss where changes can make a positive impact and involve users early in the process. When users are part of the process of change, they are more likely to embrace it.”

For organizations looking to modernize their AR processes, finding the right partner is crucial. LeHew emphasized the importance of working with providers who offer strong change management support, including use-case scenarios, training and ongoing support during implementation.

“Look for a partner that can drive speed to value and provide the face time needed to ensure successful adoption,” he said. “Change management is key to realizing the full benefits of automation.”

As businesses continue to navigate an increasingly complex and competitive landscape, the need for efficient, automated AR processes is clear. By embracing automation, organizations can unlock competitive advantages, improve cash flow, and improve both customer and employee satisfaction.

“Automation is not just about efficiency; it’s about driving growth and ensuring that your business remains competitive in the long term,” LeHew said.

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• The Invoice Avalanche: How Outdated AR Threatens Cash Flow
• AR Automation Paralysis: What Is Really Holding Companies Back?
• Alleviating Manual AR Headaches
• Ditch the Paper Chase: The 5-Step Guide to Automating AR

The Invoice Avalanche: How Outdated AR Threatens Cash Flow

While Silicon Valley is racing to build the next artificial intelligence (AI) unicorn, many businesses are drowning in paper invoices. This mismatch is not just inefficient; it is a financial hazard waiting to detonate.

Firms are gambling with outdated AR as a tsunami of digital invoices approaches.

Manual AR leaves firms suffocating under the weight of payments backlog.

Manual AR processes pose an existential threat to businesses in the U.S. In a recent study, half of firms surveyed lament excessive time wasted on processing AR, and 44% struggle with delinquent payments collection. An alarming 43% of organizations report confronting too many late or delinquent payments, while 46% find it difficult to reduce days sales outstanding (DSO). This pattern of inefficient resource allocation and diminished productivity underscores the growing incompatibility of manual AR processes with the pace and complexity of modern business transactions. Consequently, many businesses face a competitive disadvantage in an increasingly digital economy.

Manual AR processes drain cash and threaten financial health.

Fifty-nine percent of businesses in the U.S. attribute poor cash flow and forecasting to outdated manual AR methods. In addition, 57% cite difficulties in managing credit risk. Even more troubling, 21% of AR teams relying on manual processes find it challenging to determine fundamental financial measures such as the credit-sales-to-AR ratio. The inability to use critical financial data creates a ripple effect that can distort strategic decision-making and severely limit business agility.

AR Automation Paralysis: What Is Really Holding Companies Back?

The AR automation train is leaving the station, and too many companies are still fumbling for their tickets. Countless businesses remain on the platform, paralyzed by a mix of budget constraints, tech trepidation and resistance to change. The costs compound daily.

Budget constraints leave firms in AR automation limbo.

Security and technology hurdles are stumbling some firms.

Security concerns loom nearly as large, with 47% of executives at mid-sized businesses identifying security as a critical barrier, second only to cost. The situation is similarly challenging for larger businesses. In a separate study, PYMNTS Intelligence found that 80% of CFOs at firms with annual revenues exceeding $250 million say the excessive complexity of automated AR workflows cripples their ability to reduce DSO. Equally frustrating for these CFOs is the lack of on-call advisory services, further impeding DSO reduction efforts. This combination of security fears and implementation hurdles acts to widen the gap between automation leaders and laggards.

Alleviating Manual AR Headaches

For businesses, automated AR unlocks a wealth of insights and efficiencies. In a landscape where cash flow is paramount, AR automation is not just an upgrade — it is the new table stakes for optimized cash flow.

Cold, hard numbers are driving interest in AR automation.

Among adopters, AR automation is delivering a knockout punch to inefficiency, with 83% of AR executives reporting enhanced process efficiency and accuracy. Seventy-five percent also cite improved cash flow and increased savings, directly impacting business growth. These benefits extend beyond middle-market companies. More than one-third of smaller U.S. companies report improved cash position visibility, while nearly one-third are slashing AR processing times. These metrics underscore AR automation’s potential to generate improvements across the financial board.

AR automation fever shows no signs of breaking.

PYMNTS Intelligence research also found that 93% of AR executives anticipate further improvements from more comprehensive automation. For example, more than half expect improved data availability, a key factor for strategic decision-making. Perhaps the greatest warning to the holdouts, 82% of AR teams using automation report increased overall effectiveness. This signals a widening chasm between “the automated” and “the manual” in the race for optimized AR.

Ditch the Paper Chase: The 5-Step Guide to Automating AR

As invoices pile up and cash flow tightens, forward-thinking AR teams are discovering a powerful ally in AR automation. For others, however, the path forward feels uncertain. In this reluctance lies a hidden cost — one measured not only in dollars and cents but also in missed opportunities and stunted growth. The good news is that the tools to transform AR from a headache into a driver of efficiency and growth are within reach.

PYMNTS Intelligence prescribes the following actionable roadmap for businesses wrestling with manual AR.

1. Audit and analyze processes. Identify your firm’s most time-consuming and error-prone AR tasks and quantify their financial impact. This data-driven approach will make a compelling business case for AR automation, showcasing potential return on investment (ROI) to key stakeholders.
2. Find the right fit for the need. Explore AR automation solutions that align with your firm’s size, industry and growth goals. Consider factors such as scalability, integration capabilities and ease of use when evaluating potential provider partners. Prioritize solutions offering customizable dashboards and real-time reporting to improve financial visibility.
3. Consider AI an ally. Embrace AI-driven tools for tasks such as matching incoming payments to invoices (cash application) and processing remittance information. Look for AI solutions that can predict payment behavior and offer actionable insights, not only speeding up AR processing but also improving accuracy. Use these tools to free up your team for higher-value, strategic work, such as building stronger customer relationships and proactively managing credit risk.
4. Go for a strategic rollout, not a big bang. Start with a pilot implementation in a high-impact area such as invoicing or collections. This allows your AR team to test the waters, refine the application and build internal buy-in for a wider rollout. Develop clear success metrics for the pilot and use the results to fine-tune a full implementation strategy.
5. Seek AR partners, not just providers. Look for AR automation partners who understand your firm’s industry and business challenges. Collaborate with those also offering strategic guidance and ongoing support to ensure your AR team’s success in the long run.

In the machinery of digital-first business, manual AR is a hand-weaving tool amid power looms. Savvy firms use AR automation to reinforce the very fabric of their businesses with optimized cash flow management and operational efficiency.

As the responsibilities and priorities of the office of the CFO continue to expand, so too does the complementary role that AR teams play in helping to contain costs, reduce DSO and preserve customer relationships. Automation solutions — particularly those driven by AI technologies — are a key tool for achieving these goals by way of faster processes, improved decision-making and better business outcomes.”

The post Businesses at Risk: The High Cost of Manual AR Processes and What to Do About It appeared first on PYMNTS.com.

The U.S. Bank Advanced Receivables platform was created in partnership with Billtrust and combines the bank’s payment and risk management capabilities with Billtrust’s AR technology, the bank said in a Tuesday (July 23) press release.

The platform is designed to help suppliers deal with the challenges they face from the time they receive an order until the cash is in their account, including manual and paper-based steps, a cumbersome credit process, billing errors and payment delays, Alberto Casas, head of product for U.S. Bank Global Treasury Management, said in the release.

“With U.S. Bank Advanced Receivables, businesses can transform their entire receivables process to drive down costs and gain real-time visibility into their financial position and cash flow,” Casas said.

The platform’s capabilities encompass invoicing, payments, cash application, collections and credit, according to the release.

Together, these capabilities can help suppliers accelerate cash flow, cut costs and deliver better payment experiences, the release said.

U.S. Bank Advanced Receivables complements another solution the bank has offered since 2021: the U.S. Bank AP Optimizer, which automates accounts payable (AP) processes, from invoice receipt to payment disbursement, per the release.

PYMNTS Intelligence has found that chief financial officers (CFOs) are looking at automation to improve their AR processes.

Specifically, CFOs are seeking to improve AR functionality and efficiency, tackle payment delays and errors, and streamline AR processes by eliminating the need for archaic manual procedures, according to “Automation Clears the Path to Getting Paid on Time,” a PYMNTS Intelligence and Billtrust collaboration.

The report also found that 67% of CFOs said their firms “probably” need more automation and 27% said they “definitely” need more.

U.S. Bank launched another tool designed for businesses in October 2023 — the Avvance offering that lets businesses offer consumer financing at the point of sale. The bank said at the time that this “embedded, multi-channel point-of-sale lending solution” for businesses lets shoppers pay over time with personalized loan options available during checkout.

In September 2023, the bank introduced an online third-party payment/treasury solution marketplace called the Connected Partnership Network.

The post US Bank and Billtrust Partner on AR Platform for Suppliers appeared first on PYMNTS.com.

Ultimately, commercial payments help define and dictate the end-to-end experience a business can provide its customers.

“Helping our customers move to a more automated payment transaction and provide their customers with a frictionless process is the biggest benefit,” Ari Widlansky, managing director and U.S. chief operating officer at Esker, told PYMNTS.

“By improving the transaction experience, it makes that customer stickier,” Widlansky added.

Getting paid is crucial to the livelihood of businesses, no matter their size, and that makes the accounts receivable (AR) function critical to growth. The shift from legacy payment systems to digital solutions is proving to not be just a trend — but a necessity.

As Widlansky explained, the multifaceted benefits of digitizing the AR function can help unlock downstream improvements in both operational efficiency and customer experience.

Still, despite the proliferation and attractive positioning of digital payment options, many businesses rely heavily on traditional methods such as checks.

“Checks are still a big part of payments,” Widlansky said. “Surprisingly, 20% to 30% is not an uncommon number to hear.”

This reliance on outdated methods can be attributed to various factors, including familiarity, inertia and a lack of resources or knowledge to implement digital solutions, he said.

As he emphasized, there is no better time than now for businesses to catch up to the 21st century and embrace the benefits of digitizing their AR programs.

Substituting Digital for Legacy Payments

Legacy payment systems come with a host of inefficiencies and risks. Manual processing of checks and other paper-based methods can lead to errors, delays and increased operational costs, while outdated payment methods can erode customer loyalty and satisfaction.

On top of all that, the lack of real-time visibility into cash flow can hinder decision-making and negatively impact working capital management.

Conversely, as highlighted by Widlansky, one of the advantages of digital payments is the real-time visibility they offer into financial data. By embracing digital AR solutions, businesses can track transactions, monitor cash flow and make informed decisions quickly.

“It’s not just the visibility, it’s the real-time visibility and being able to take that data and transact and make decisions based on that data in real time,” said Widlansky. “This is where you can unlock value across the entire invoice-to-cash experience.”

Automating the AR process also reduces the manual effort required, allowing employees to focus on more value-added tasks. This efficiency can lead to cost savings and improved productivity across the organization.

At the same time, Widlansky explained that digital AR solutions provide the flexibility needed to scale operations, whether domestically or globally. They support mergers, acquisitions and other growth initiatives by integrating seamlessly with existing systems.

Digital payments also provide a seamless and frictionless experience for customers. The ease of transaction can strengthen customer relationships and enhance brand loyalty.

Read also: Getting Paid: Digital Payments for Improving Cash Flow and Customer Experience

Driving Down DSO and Building Stronger Bonds

Despite the benefits, some businesses hesitate to transition to digital payments.

Common barriers include a lack of resources, resistance to change and concerns about the complexity of implementation. Widlansky emphasized the importance of change management and organizational readiness, saying, “Change management is key to a successful implementation. Ensuring that internal teams are organized and committed to the initiative is crucial.”

“When you go from paper to digital, there’s a change period … and that change needs to be managed,” he added. “It’s easy to fall back on, ‘This is what we’ve always done in the past and I’m used to this.’”

Looking ahead, the potential for innovation in the digital payment space is immense, and Widlansky noted that there’s an ongoing and substantial shift in mindset from using digital AR programs to merely address a pain toward viewing AR automation as a way to unlock growth.

The integration of artificial intelligence and machine learning is also set to further enhance the capabilities of digital payment systems. These technologies can provide deeper insights into customer behavior, optimize payment processes and even predict future trends.

“Esker is at the forefront of AI integration, with 25% of our 1,100 employees worldwide focused on R&D,” noted Widlansky.

This focus on innovation ensures businesses can stay ahead of the curve and continuously improve their operations.

By embracing digital payments, businesses can unlock efficiencies, enhance customer experience and position themselves for sustained growth.

As Widlansky summarized, “Define what success means for your company upfront. This can save you so much time, energy and resources.”

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The platform can also help companies streamline the reconciliation process, collect payments and offer extended payment terms to their customers, the company said in a Monday (June 17) press release.

“The launch of our Global Accounts Receivable platform represents the latest step in our mission to digitize and streamline key steps in B2B global trade,” Eyal Moldovan, co-founder and CEO of 40Seas, said in the release.

With invoice data centralized in a single dashboard, companies can more easily track payment statuses, manage due dates, expedite invoice approvals and mitigate the risk of payment delays, according to the release.

When the accounts receivable (AR) platform is connected to a company’s enterprise resource planning (ERP) system or accounting software, the company can benefit from a streamlined reconciliation process that matches invoices with purchase orders and delivery receipts in real-time, the release said. Companies can also collect payments via credit card, direct debit or digital wire transfers in different currencies.

With the platform’s ability to help companies offer extended payment terms of up to 90 days to their customers, companies can do so without absorbing any credit risk, per the release. 40Seas leverages data-driven technology to verify creditworthiness, assess risk and process financing.

Together, these capabilities of the Global Accounts Receivable platform are designed to replace manual AR processes that are prone to errors and that undermine productivity, Moldovan said in the release.

“In today’s increasingly congested supply chain landscape, improving cash flow management through automation is an absolute prerequisite for longevity,” Moldovan said. “Our real-time tracking enables companies to easily monitor invoice statuses, identify bottlenecks, optimize workflows and drive business growth.”

40Seas emerged from stealth in January 2023 with the announcement of an $11 million seed funding round complemented by a $100 million credit facility for exporters and importers.

The company’s first offering was a platform for cross-border trade financing designed to facilitate access to finance for small- to medium-sized businesses (SMBs) and “make life easier” for both importers and exporters.

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Just as in consumer payments, digital methods have the power to ease and speed the business-to-business (B2B) payment process. Electronic payments can significantly reduce not only the costs of payment processing but also the days sales outstanding (DSO), or the time it takes to receive payment for services provided, resulting in healthier cash flow and more efficient financial operations. Moreover, digital payments offer a more streamlined and convenient payment experience, further enhancing revenue generation by fostering strong B2B relationships and customer loyalty.

• Legacy Payments Cause Considerable AR Pain
• Digital Payments Dramatically Improve DSO
• Digitalizing to Enhance the Customer Experience
• Driving Down DSO and Building Stronger Bonds With Digital Payments

Legacy Payments Cause Considerable AR Pain

Despite the digital shift of recent years, a continued reliance on legacy payment methods is still a significant source of pain to businesses worldwide.

Legacy payments are driving up DSO …

… and costing firms big.

Paper checks lengthen DSO by several days at least, as vendors must not only wait for them to arrive by mail but also endure processing delays. A good example of this is in the construction space, where 76% of subcontractors say they are almost always paid by general contractors and property owners with paper checks. In 2023, slow and delayed payments cost these businesses $273 billion. Checks are costing buyers, too, with experts estimating a cost of $4 to $20 per check for preparation, including labor, materials and postage. By comparison, digital payment processing costs roughly 30 cents per transaction. Clearly, both sides of the ledger stand to benefit from removing this legacy method from the B2B payment process.

Digital Payments Dramatically Improve DSO

Implementing digital channels for customer transactions streamlines the payment process, effectively reducing delays and errors that can worsen DSO.

Offered through a self-service payment portal, integrated digital payments allow suppliers to be paid for their services online easily and securely in the payment modality of their choice. Meanwhile, the portals incentivize buyers to pay on time or early through features such as supply chain financing and discounting, ensuring that both parties maintain a healthy cash flow. It is no surprise that 83% of surveyed firms consider moving to fully electronic payment processing to be important or very important.

Digital payments’ better transparency and cash flow forecasting bolster the bottom line.

A recent survey by Citizens Financial Group confirms that treasury executives are recognizing the strong advantages of digital payments. The study found that 97% of middle-market firms that adopted digital treasury processes reported improvements to their cash flow processing, with 96% noting enhanced financial visibility and control. Another 91% said these benefits bolstered their companies’ bottom lines. As a result, 94% of treasury departments that use checks expect to transition their companies entirely to digital payments within the next five years.

Instant payments are a boon to B2B transactions

Furthermore, even within digital payments, processing time is a key consideration. Faster digital payments such as real-time payments have an enormous speed advantage. While checks and even slower ACH payments can take days to process, real-time payments settle instantly. The Citizens study highlights the trend of mid-sized businesses increasingly embracing instant payments to capitalize on these process improvements. This year, 77% adopted instant payments, compared to only 62% one year ago. Of these adopters, 92% of firms now leverage the RTP^® network, while 77% have implemented the FedNow^® Service.

According to a newly published survey from the Federal Reserve Financial Services, 92% of businesses say instant payments benefit B2B use cases. The primary drivers behind businesses’ adoption of instant or faster payments include cost reduction (cited by 48%), the ability to pay and be paid according to customer preferences (39%) and the 24/7 year-round accessibility of instant payment services (35%). These benefits prompted 86% of businesses to adopt faster payment methods last year, 74% of which were provided by their financial institutions.

Digitalizing to Enhance the Customer Experience

Legacy payments not only harm companies’ cash flow but also damage their customer relationships. Introducing digital payments can bring significant improvements to customer loyalty in B2B relationships.

SMBs are digitalizing B2B payments to enhance the customer experience.

Adopting digital platforms for both receiving and making payments has become a critical concern for small firms, to the extent that many are willing to abandon their current banking relationships in favor of these faster payment options. In a recent Chase for Business survey, 54% of small to mid-sized business (SMB) owners said they would change banks to access same-day ACH payments. This is in line with a general trend toward digital transformation across the board: 90% of SMBs said they prefer to receive B2B payments electronically, while 78% said they prefer to pay employees that way as well. In addition, more and more SMBs are looking to implement artificial intelligence (AI) to enhance the overall customer experience.

Driving Down DSO and Building Stronger Bonds With Digital Payments

Digital payments can play a crucial role in reducing DSO for firms struggling with late payments. By leveraging the speed, efficiency and transparency of digital transactions, businesses can not only accelerate their receivables but also enhance their liquidity and cash flow. Unlike traditional payment methods such as paper checks, which take several days for mailing, receipt and clearance, businesses can process digital payments almost instantaneously, expediting the conversion of sales into cash.

Digital payments can also foster stronger B2B partnerships. Prompt and reliable payments are fundamental to establishing trust and credibility with suppliers, while offering buyers’ preferred payment methods and options such as discounting and financing shows a dedication to customer service that incentivizes both loyalty and faster payment. Adopting digital payment methods, in short, is an investment that is likely to pay in long-term revenue gains and financial health for both sides of the B2B equation.

The post Getting Paid: Digital Payments for Improving Cash Flow and Customer Experience appeared first on PYMNTS.com.

The tools aim to empower finance professionals by providing them with business insights and enabling them to make strategic decisions and engage customers more effectively, the company said in a Thursday (May 30) press release.

One of the key features introduced by Billtrust is the Finance Co-Pilot, a generative AI tool that offers deep analysis of customer data, according to the release. Users can input questions in plain language and obtain instant insights and recommendations. The tool provides views of customers’ cash flow efficiency based on key AR user personas, allowing finance professionals to benchmark, answer questions and make informed recommendations.

Billtrust also introduced two new analytics modules: Payments Analytics and Cash Application Analytics. These self-service reporting dashboards provide finance professionals with real-time data and insights, enabling them to obtain a holistic view of their business, the release said. By using these analytics modules together, finance professionals can make faster decisions, improve cash flow and working capital, and ensure customer satisfaction.

The Payments Analytics module supports strategic decision-making by providing a clearer understanding of buyer behavior and trends such as timeliness, payment preferences and variability, per the release. It also enables a more targeted customer engagement strategy, allowing businesses to improve outreach and transition buyers to online platforms.

The Cash Application Analytics module helps users understand data on overall matching performance, match volume and payment volume at a buyer/payer level, according to the release. It allows businesses to recognize trends and isolate “bad payors” by customizing parameters for formulating a bad payor list.

Both Payments Analytics and Cash Application Analytics offer enhanced data analysis capabilities, including flexible time series visualization, interactive key performance indicators, comparative data examination and competitive benchmarking, per the release.

The ability of language models to understand and interpret data marks a shift toward making AR a strategic asset for enterprises, Ahsan Shah, senior vice president of data intelligence at Billtrust, told PYMNTS in an interview posted in February.

Generative AI helps solve existing problems in a “more accelerated” way and further automates processes and improves analytics for better decision-making, Shah said.

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With this integration, the CTS Systems platform will offer corporate travel agents and hotels a single-source solution providing consolidated, digitized and secure invoice processing, the companies said in a Wednesday (May 8) press release. 

“By partnering with Corcentric, we’re able to leverage our existing platform to vastly improve the flow and speed of payments to hotels and commissions to booking agents,” Carl Roberts, founder and president at CTS Systems, said in the release.

Corcentric’s Managed AR solution helps customers eliminate bad debt, payment risks and high days sales outstanding (DSO), according to the release.

The solution includes support from subject matter experts, financial services and software, per the release.

Integrated with the CTS Systems platform, this offering will customers in the corporate travel and booking industry make travel booking processes “convenient, easy and fast,” Matt Clark, president and CEO at Corcentric, said in the release.

“CTS has a long history of solving for pain points that do just that, and we are honored to work with them on this latest venture to bring our Managed AR onto their platform to ease the burden of the invoicing and payments process for their clients,” Clark said.

PYMNTS Intelligence has found that specialized software and automation act as engines for efficiency, speed and accuracy in AR and accounts payable (AP) workflows, replacing labor-intensive, manual processes that are prone to human error and delays.

Eight in 10 chief financial officers (CFOs) with automated AP/AR processes reported significant reductions to friction and disruption, according to “Why CFOs Recognize the Need to Automate AP/AR Workflows,” a PYMNTS Intelligence and Corcentric collaboration.

Customers are starting to realize that enduring friction points along the business relationship and B2B transaction journey aren’t necessarily worth putting up with,” Clark told PYMNTS in an interview posted in June.

“You don’t have to look much further than B2C today for the future of B2B tomorrow, when it comes to things like efficiency and digitization,” Clark said. “Some of the newer generations rising up in organizations just won’t accept some of the things that have been taken for granted as status quo for decades — they’ll say this is too difficult, this needs to change.”

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Yet, PYMNTS Intelligence found that in most cases, the process around receiving and processing these ad hoc payments is far from efficient. Delays are common, and those delays can result in cash flow shortfalls — which can be especially detrimental to smaller firms. 

In PYMNTS Intelligence’s “How Instant Ad Hoc Payment Costs Impact Small SMBs,” a collaboration with Ingo Payments, we determined one way many SMBs are overcoming these inefficiencies and delays is by leveraging the use of instant payment methods. Doing so enables SMBs to turn ad hoc payments more quickly into working capital, which is especially important to those small SMBs who are the primary receivers of ad hoc payments. 

Ad hoc payments make up 72% of SMBs’ AR volume in dollars, and using instant payment methods can provide them with timely receipt of their funds. This likely explains why the share of ad hoc payments received instantly rose 24% since September 2023. 

However, for many SMBs, the cost of processing instant payments can be prohibitive. The smallest SMBs — those generating less than $100,000 in revenue annually — have decreased their use of instant payments since September 2023, we found, likely because of the fees associated with processing instant payouts. 

But PYMNTS Intelligence data suggests that those SMBs that opt to process ad hoc payments manually — because they believe they are saving money by doing so — may ultimately be misguided.

In exclusive PYMNTS Intelligence data was not included in the final edition of “How Instant Ad Hoc Payment Costs Impact Small SMBs,” we found that the smaller the SMB is, the more likely it was to process ad hoc payments manually. 

As the chart illustrates, 44% of SMBs earning less than $100,000 annually rely mostly on manual methods of processing their ad hoc payments; 38% of those earning between $100,000 and $1 million annually do the same. Meanwhile, 52% of those SMBs earning between $5 million and $25 million annually and 48% of firms earning between $1 million and $5 million rely primarily on automated ad hoc payment processing. 

This reliance on manual processing is especially important to note because firms that rely on internal, manual processes actually pay the highest fees: $12.70 per transaction, or 9% more than what SMBs relying primarily on automated systems pay. 

In other words, when smaller SMBs do pay to process their ad hoc payments instantly, they pay more, which likely reinforces their fee-averse position. 

But by incorporating external vendors and intermediaries to process ad hoc payments instantly, fee-averse SMBs could actually lower their overall costs in the end. 

PYMNTS Intelligence found that 57% of SMBs overall are now willing to pay a fixed fee to receive instant payments, while one-quarter of the smallest identify the expense associated with instant payments to be the biggest barrier in their adoption of instant payment processing. 

The lesson here is twofold: It’s costing smaller, fee-averse SMBs more to process their ad hoc payments manually. Meanwhile, those senders looking to enhance their relationships with smaller SMBs might be missing an opportunity to do so by offering them free or low-cost instant payouts for ad hoc payments. 

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