Digital technology — whether it is used to conduct virtual classes, remote work meetings, telehealth appointments or in myriad other ways — has become the primary means by which the world has adapted to the pandemic. From a bottom-line perspective, digital has become singularly important for another reason: It is the channel that a growing number of customers and clients are using to pay businesses.
One might think that most technology firms would not be subject to the types of frictions that have long accompanied B2B payments, but this is not exactly the case. Three-quarters of technology firms consider their payment operations to be only “somewhat effective” at best, in fact. At the same time, these firms are spending an average of almost 3 percent of their annual budgets on their payments operations, including processing fees, staffing and third-party providers. These were among the findings that emerged from the Payments 2021 study PYMNTS released earlier this year.
The Smart Receivables Playbook: How B2B Technology Firms Can Bring Seamless Payments To The Back Office, a PYMNTS and Flywire collaboration, outlines a path forward for technology companies on what they need to bring the same kind of single-click efficiency consumers and businesses associate with their products to their own accounting operations. The report expands on PYMNTS’ Payments 2021 research and features case studies on several technology firms.
The challenges B2B technology firms face reflect the complexity of the sector itself. They often must manage multiple client relationships across bank and payment networks that span various geographies — all while protecting against escalating fraud threats. The pandemic has only intensified these hurdles, especially as technology firms often maintain lean workforces or even lack back-office staff altogether.
Cross-border payment relationships in particular come with a host of regulatory and routing complexities, and these can lead to significant demands on employees’ time in addition to considerable unanticipated impacts on firms’ bottom lines. These challenges can be especially taxing for smaller firms that lack offices in foreign markets and therefore must contend with differing time zones, languages and banking and regulatory systems.
“This gets even more complicated for businesses collecting credit card payments internationally, where payment options and methods vary by location,” Michael Schrezenmaier, chief operating officer for the customer relationship management software Pipedrive, noted in one of the Playbook’s case studies.
These circumstances point to the need for digital platforms that can optimize accounts receivable (AR) processes end to end, from contract to collection, while allowing technology companies’ team members to focus on their core products.
These findings represent just some of the insights gleaned from our research and interviews. To learn more, download the Playbook.
Source: https://www.pymnts.com/accounts-receivable/2021/tech-firms-move-ar-back-office-to-front