The referenced posting appears in Digital Commerce 360 and discusses the need for manufacturers and distributors who are pursuing an e-commerce strategy (one would think this is an accepted practice these days but not really) to have a modern receivables process that allows buyers to more easily pay for invoices at the supplier portal. The writer is a marketing manager for a fintech named Corevist, based in North Carolina, and provides manufacturers with ERP integration services for e-commerce. It is good for readers to remember that B2B e-commerce is fundamentally different than the consumer paradigm, including the payment experience, which for businesses includes an invoice and follow-on payment versus the pay now consumer version. The author describes the process as self-service e-payments.
‘That means B2B ecommerce solutions must offer a payment method of “invoice” for finalizing orders—but it also means customers need a way to pay down those invoices through a self-service portal, ideally one that’s integrated to the ERP for real-time account standing, invoice payment, and more….In other words, B2B ecommerce on its own can speed up the browsing and buying experience for customers, but it won’t speed up cashflow without some thought given to web-based accounts receivable (A/R). That’s because every B2B ecommerce order will still land in the traditional invoice queue, which creates friction for all parties involved.’
The pandemic has certainly resulted in a greater interest around working capital efficiency among just about everyone. So creating a frictionless experience for a buyer (or at least one with less friction) is important to getting paid more quickly, thereby reducing DSO. As the author also points out, creating a more easily navigable payment experience can lift temporary credit blocks, which keeps the pipeline filled with ongoing business, something that everyone now knows can be disrupted from any number of things.
‘On the customer side, delinquent credit status can cause confusion as B2B ecommerce orders go on credit block. What’s more, without a web-based payment solution, customer account management will continue to require cumbersome processes like phone calls to the vendor’s A/R department and placing checks in the mail. All of these throw roadblocks in the way of B2B e-commerce success for both the vendor and the customer.’
Another good point is the additional complications presented by cross-border scenarios, which of course will challenge many manufacturers given global trade. Any inefficiencies that are caused by paper processes are multiplied by a factor of x when international business is involved. Therefore a more integrated and digitized system extracts even more friction, especially if more standardized through the ERP solution. A good quick read to remind one that the tech exists to get done what needs to be done.
‘Wherever manufacturers and distributors fall in this landscape, one thing is clear: B2B buyers want to buy online, and they’d like to pay online, too. Not every customer relationship is ready for credit card payments, which means invoices are here to stay. Yet manufacturers and distributors can make life easier for customers (and for their own A/R teams) with a self-service B2B payments portal that’s integrated to their ERP system.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.
