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An Order-To-Cash Overhaul Is Coming For B2B Payments

PYMNTS December 2020 Global B2B Payments Playbook done in collaboration with Worldpay makes a simple, somewhat baffling observation: “Many B2B payments are [still] being made over the same rails that firms have leveraged for decades, utilizing familiar payment tools and being supported by the same pre- and post-payment systems.”

Hard to believe? Frankly, yes. Voices in the B2B space are baying for payments modernization, and a great place for many companies to start is in their order-to-cash (O2C) cycle.

“The order-to-cash (O2C) process — which describes businesses’ end-to-end sales procedures from the initial presale activities to payment and invoice receipt — does appear to be shifting toward a new digital normal,” the new Playbook states.

“Companies and their payment partners have been incrementally incorporating new technologies to enhance or innovate aspects of their O2C processes, and this innovation seems to be kicking into high gear during the pandemic. Thirty-nine percent of companies have moved from manual processes to digital methods for their B2B payments since the crisis began, recent PYMNTS data shows,” and that’s a positive development for post-pandemic B2B commerce.

Improving Cash Flow, Reducing Expenses

With many firms running a melange of tech that merely resembles a stack — CRM, ERP, and eCommerce platforms all operating without genuine integration — they are not getting the benefits of a unified platform environment that has no silos to begin with.

“Business is cyclical. The order-to-cash process is no exception,” Michael Shields, business line executive, receivables, Worldpay B2B Payments, told PYMNTS. “We are currently seeing a convergence of … two initiatives, with companies seeking to leverage automated solutions featuring AI to improve cash flow and reduce operational expense. Companies have also recognized the need for AP departments and treasury teams to break down the silos and work closer together than ever. With AI that accurately predicts the expected payment date of invoices, companies have solved their short-term cash flow forecasting challenges.”

Shields added, “By adopting solutions that combine AI and process automation to future-proof their order-to-cash process, companies are solving for whatever comes next.”

What comes next is a flood of automation and interoperability to improve processes, better serve customers domestically or internationally, and ultimately increase profits.

End-To-End Processes Get More Love

Awareness gaps may persist, but even small businesses have gotten the gist of digital transformation and the need to automate any process fraught with fraud or failures.

As the Global B2B Payments Playbook states, “New research suggests that firms are becoming more interested in revamping their end-to-end approaches. A recent study found that 65 percent of businesses are in the process of enhancing their O2C processes, with many claiming that they are doing so to improve communication between all steps in the process.”

Similarly, 61 percent of companies want to improve O2C cycles to optimize internal collaboration. It’s positive movement, although sentiment is that firms should pick up the pace.

“Regardless of businesses’ intentions, the survey also found that only 16 percent have actually transformed their O2C processes within the past five years. This indicates that numerous firms may still be struggling with determining how best to connect all aspects of their O2C processes, even though they wish to do so,” per the Playbook.

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