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Digital B2B Payments Partnerships

The pandemic has caused business owners to analyze what processes they can improve. They must do this to not only stay in business but succeed.

People are considering what the “new normal” will be. And at the center of it is an emphasis on digitizing and automating business practices. A business can benefit from digitization in many ways. 

The department that can see the most benefits is Accounts Payable.  Digitalization improves accuracy and speed of payments. Digitization enriches data tracking. It creates a more efficient environment with greater insight and control.

The focus current on digitization of remains one-sided. Businesses are more concerned with improving the efficiency of Accounts Receivable. But, it’s important to not lose sight of AP.

You may think that collecting money is the most important aspect of your company. But, paying vendors is a huge component of how successful you are. The more efficient your AP department is, the more cost-effective it will be as well.

The Federal Reserve Bank estimates that “large-scale adoption” of automated AP processes could save businesses in the United States more than $100 billion collectively.

You can achieve significant cost savings by digitizing and automating AP. You can also create significant extra value for your customers. You can reduce costs to your customers by sharing a part of rebates from a digital ePayables system.

There are many companies that offer AP software and automation tools. Some will offer products that will cover part of the AP process, such as B2B payments. Others are a more full-service solution.

Now is the perfect time to evaluate a product that will allow you to streamline B2B payments. It’s the type of efficiency that will be necessary in the post-pandemic business world.

By automating AP, you’ll be streamlining your own operations. You’ll be reducing costs in the process. You’ll be building stronger relationships with your vendors. You’ll be saving money by avoiding late fees. You’ll be earning discounts by taking advantage of early-payment incentives. And you can even add a differentiating solution to your customers to build your business.

Here are a few things to consider when you’re looking for an issuing partner. Not all products are not created equal when it comes to B2B payments. And neither are the companies that offer them.

Wade Through the Noise

Automating AP allows you to eliminate checks and ACH transactions for B2B payments. The pandemic certainly highlighted the problems of relying on checks for B2B payments. Even without the pandemic, though, they were already on their way out the door.

The cost-savings from moving away from checks and ACHs can be significant. But, don’t focus just on this amount of money that you can save. There is also plenty of revenue to earn through ePayables, too.

A company may only focus on the “soft cost” calculations. If they do, they are likely hiding behind their weak offering. Many companies will offer you a rebate for all B2B payments made using their ePayables system.

This can be a significant additional stream of revenue that can boost your bottom line. You can even pass on part of the savings to your customers, incentivizing them to buy more or pay in a certain way or by a certain time. 

Focus on the Revenue

Saving money is great. Making money at the same time you’re saving money is even better.

Companies that provide ePayables systems should also provide you with a percentage rebate for every payment made through the system. In a way, this will operate like cash back on a credit card.

When shopping for a provider, make sure you’re getting at least 1.5% of the spend returned to you. You can then control how much of that rebate you want to share with your customer. You could use this to reduce the cost of their purchases, or create a rebate opportunity for them as well. 

The issuing program manager should offer multiple card brand products to optimize revenue. Some firms may quote you a large percentage or amount of revenue, but make sure you are comparing apples to apples. A higher rebate percentage only makes sense if the cost of their services isn’t astronomically higher than competitors.

Maintain a Relationship with Your Customers

You may have a few options for how you roll out your ePayables system. With a white-label solution, there’s no need to introduce a third party to the mix. Your system will be branded with your company and look as if you’re providing it directly.

Some providers may try to require you to refer your customers to them. They’ll then own and manage that relationship, and pay you a referral fee in the form of the invoice payment. In that case, the extra revenue opportunity would completely disappear.

Some providers may also require you to turn over all control of your AP department. Outsourcing AP functions is an entirely different conversation than integrating ePayables, though. So, make sure you understand the difference — and what you’re getting. 

Understand the Platform

You should look for a service provider who has created a platform specifically for virtual B2B payments. The platform should have multiple interface options. It should be flexible. It should include APIs and NextGen technology to make it agile.

Most program managers license a virtual card issuing platform from a provider with a legacy system that was built for something other than virtual cards. They then tweak that system to support the B2B payments industry.

This would provide little to no flexibility. Consider that you will be working within the confines of their legacy system, too. This could mean a lengthy implementation of six to eight months. 

In today’s tech-focused world, this should be unacceptable. There’s simply no need for onboarding times of that length. There’s also no reason why you should settle for an off-the-shelf solution that isn’t flexible and adaptable to your needs.

You should have the opportunity to decide how you’d like to interface with the system, not told exactly how you will do it. Customer contracting and on-boarding should be automated and simple. 

Enable Your Suppliers

Finally, your system should integrate supplier enablement into the payment solution. This should include identification of suppliers who accept ePayables for payments, and who also can integrate digital invoice delivery and approval.

An ePayables system has limitations on the receiving end if your suppliers are unable to integrate with your digital system. Manual work bogs down the system, and prevents you from reaching peak efficiency.

Partner with BluePenguin

Your partnership with an ePayables program manager should be a simple Value-Added Service. The journey should include you delivering the last mile to drive significant revenue to you and your customers. It should also create stickiness, which translates into both customer retention and new customer acquisition.

The best partner for you should be one that combines the perfect rebate amount with the right level of customer control with a flexible and customizable interface.

BluePenguin is the company that provides the complete solution for AP automation. Contact us today to find out more.

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