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Businesses Turn to Next-Gen Payment Systems to Streamline Supply Chain

Wholesalers are racing to capture the attention and business of new clients with the industry set to expand — growth that could lead to new opportunities for distributors, especially as many look to move forward from the negative economic impacts of the global health crisis. However, distributors must move swiftly to ensure they can offer the seamless, digitally-optimized experiences businesses are now expecting by removing friction from the supply chain and its associated payment processes.

Many distributors still rely on checks to make many of their business-to-business (B2B) payments, however. This continued reliance on manual methods could lead to payment delays that stymie businesses’ cash flow, in turn creating frustrations that could cause companies to seek alternative distribution partners. Finding ways to streamline payment processes is therefore essential for distributors as they look to keep their client businesses engaged.

In the latest edition of The Treasurer’s Guide To AR Payment Optimization, PYMNTS analyzes how distributors’ payment needs are shifting and why being able to accept and reconcile check payments at speed — as well as make room for emerging digital payment tools — is becoming essential for such companies to engage and retain clients. 

Around the B2B Payment Optimization World

A growing number of companies are relying more heavily on digital channels for their sales as supply chain needs shift. One recent study found that more businesses are seeing a higher amount of their revenue come from eCommerce purchases. The report found 37% of its respondents stated over 20% of their yearly revenue originates online, with a growing number of distributors also reporting their digital strategies are becoming more mature. Only 22% of firms reported they were still in the “nascent” stage of transitioning to eCommerce, compared to the 32% who stated the same in 2021. This indicates that creating a robust and innovative eCommerce strategy, complete with swift payments, is becoming critical for businesses to remain competitive.

This migration to online channels may also help to foster new growth for distributors and wholesalers. Another recent study found the value of the global wholesale market is expected to reach $64 trillion by the end of this year, representing a 7% compound annual growth rate (CAGR) from its $49.3 trillion value last year.

This predicted increase in value is also occurring as many companies take steps to move more of their operations online — other predictions state approximately 80% of B2B payments will be made through online channels by 2025, for example. Companies must therefore take swift steps to ensure they can accept digital payment methods to keep pace with such developments.

For more on these and other stories, visit the Guide’s News and Trends. 

BlueGrace Logistics on Creating Space for Digital Payments as Supply Chain Needs Shift

It is critical for companies carrying physical goods to ensure they keep their inventories fully stocked at all times to ensure smooth operations, making a convenient and speedy payments process essential. However, many companies are still utilizing paper checks to make and receive their B2B payments — something that has led to increased friction since the start of the pandemic as more firms took their operations digital. Companies must therefore move to create space for new, digital payment options while also continuing to support familiar checks, explained Mike Dolski, chief financial officer for supply chain management provider BlueGrace Logistics.

To learn more about how companies can support emerging payment tools as supply chain needs change, visit the Guide’s Feature Story.

How Wholesale Distributors Can Streamline Check Payments and Open the Door to B2B Innovation

United States wholesale distributors alone generate about $991 billion in collective yearly revenue, but continued reliance on paper checks and other manual payment methods could be hampering future growth. While paper checks still account for a sizeable portion of companies’ typical B2B payments, demand for swifter, digitally-optimized transactions is on the rise across multiple industries. The use of paper checks can lead to supply chain issues and frictions that could compromise distributors’ ability to keep customers engaged and satisfied. However, it is also critically important to ensure companies are keeping space for check payments as they and their partners look to reduce their reliance upon them.

To learn more about how wholesale distributors can streamline their check payments while also creating opportunities for B2B payment innovation, visit the Guide’s PYMNTS Intelligence.

About the Guide

The Treasurer’s Guide To AR Payment Optimization Tracker, a PYMNTS and CheckAlt collaboration, examines the latest B2B and consumer payment trends and how businesses can keep pace with them. It also outlines which solutions and technologies are becoming key to companies’ payment optimization efforts.

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