Simplify Your Accounts Receivable with Smart Payments

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Accounting for B2B (Business to Business) payment transactions can be a chore. Payments received must be matched with accounts and amounts due. This would be easy if all payments came with their own set of details – such as itemized order information, transaction numbers, correct dates, etc. But they don’t always. And what about partial payments or multiple payments combined? Think of the time wasted while your Accounts Receivable (AR) team tries to match payments and distribute them properly.

Some payment methods, such as ACH (automated clearing house), supply very little information. They leave the juggling and jigsaw piecing up to your staff.

The good news is that as B2B businesses move increasingly to digital payment methods, there are tools that can lessen the cash application challenges. Smart payments go beyond simply moving funds from the sender to the recipient. Smart payments carry critical business information right along with the payment. This gives your Accounts Receivable team the data they need to easily reconcile incoming payments with the corresponding invoices.

Smart payments optimize the entire B2B payment process

With payments carrying critical business information, the payment is contextualized, and the whole AR process becomes more cohesive, less labor-intensive.

Good examples of smart payments are those made through online payment portals powered by SaaS solutions or a payment solution integrated with your ERP system. Because of the control allowed by the direct digital payment method, all the necessary customer data is captured and attached. Whether it’s ACH, credit cards, or other methods, you’ll be able to see which invoice is being paid and keep track of any discounts applied.

‏‏‎ The challenge

Recognizing how much smart payment methods can help your business is one thing, but you need to encourage the organizations you do businesses with to adopt them. This is no longer the challenge it once was. True, many businesses still want to pay invoices by check, but that is changing. Payment by check for B2B transactions is steadily declining. Buyers and sellers are ready for a more secure, more streamlined approach.

Especially amid COVID-19 concerns, more businesses are choosing digital alternatives to many of their manual processes.  In fact, A recent study from McKinsey & Company reported that since the onset of the pandemic, 60% of B2B decision-makers are open to making fully remote purchases over $50,000, and nearly 90% believe that going digital will remain fixed post-COVID.

Still,  without an easy way to capture remittance data and match incoming payments with open receivables, accepting digital payments will be a challenge for most B2B suppliers. With payment portals set up correctly, all the appropriate data can be captured and transmitted at the time of payment. You can also create rules allowing customers to provide a reason for making partial payments (from a predefined list). That will remove a significant obstacle in the traditional cash application process. The best payment portal solutions will also integrate seamlessly with your ERP system so that incoming payments are posted automatically, further reducing your team’s workload. ‏‏‎ ‎

Smart payments are smart and safe 

Safety and security are a priority for businesses, especially now. Suppliers need to feel confident when making or receiving digital payments. Smart payments address security concerns head-on, and online payment solution providers can ensure secure transactions by tokenizing and encrypting payment data.

Compliance regulations such as the Payment Card Industry Data Security Standard (PCI DSS) and System and Organization Controls (SOC1 and SOC2) give users additional peace of mind that sensitive payment data is maintained in a secure environment.

What can smart payments do for you?

Manual AR processes are inefficient, tedious, and preventing your team from performing truly impactful work. AR automation drives productivity, accelerates cash flow, and frees you up to deliver better customer experiences.

Smart payments ensure that crucial remittance information is attached to payments. They bind data with payments, applying cash in the right places at the right time.  They eliminate the need for manual cash application while ensuring accuracy and speeding up the Accounts Receivable process.

Would you like to see what smart payments can do for your business? Contact Versapay, the leaders in collaborative accounts receivable, and ask for a demo.

By Versapay,

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