Every year, Ardent Partners publishes several benchmark studies into the accounts payable (“AP”) marketplace. One of those is the annual research effort into the state of business-to-business (“B2B”) payments, called “The State of B2B Payments 2015: Emerging Business Value” this year, which Ardent is proud to announce is now available. The report captures the perspectives, experience, and accomplishments of more than 200 AP and finance leaders, as well as examining the trends affecting the marketplace and offering recommendations for improvement. The full report is available for download here.
In a previous article in this series, “B2B Payments 2015: How Remittance Information Determines ePayment Adoption,” Ardent analysts examined how the level of detail—or lack thereof—in remittance information can determine whether or not suppliers accept payment via electronic methods. It is partially as a result of this need for remittance information that paper checks, which do not limit the amount of remittance data that can be included, have retained a significant portion of B2B payments.
Given new advances in electronic payment (“ePayment”) technologies, however, this is no longer the entire story. Clear advancement in ePayment solutions has resulted in more robust remittance information which can, in some cases, rival the depth of intelligence that paper checks have historically provided. Remittance information is a critical part of the payment delivery process, and how detailed a payment method’s remittance data is can potentially determine how widely it is used. That said, successful AP teams tend to share three key remittance capabilities, which are enumerated below.
- Structured and standardized remittance information (61%)—The more structured and standardized remittance information is, the easier it is for the accounts receivable (“AR”) team to reconcile a received payment. That nearly two-thirds of the organizations surveyed for Ardent’s B2B payments study possess this capability is a strong indicator that buyers recognize the value in providing rich remittance information to their suppliers.
- Submission of remittance information together with electronic payments (49%)—For many ePayment methods, the remittance information that was provided arrived separately from the payment itself. This caused confusion and delay, resulting in AR taking much longer to reconcile the payment and mark it as paid in the order system. The ability to provide remittance data and the ePayment at the same time is thus a critical piece of making it easier for suppliers to accept payment electronically.
- Standardized reconciliation of remittance information (43%)—While this is technically more of a capability on the supplier side than the buyer one, standardizing reconciliation is still a valuable capability regarding remittance information. As a general rule, greater standardization in the reconciliation process means more payments can be processed faster and with less effort overall. This can result in more payments processed per full-time employee, which leads to more cost savings overall for the supplier.
Final Thoughts
Ardent analysts have written extensively on the necessity of rich remittance information and how ePayments have been historically weaker in this area when compared with paper checks. This is no longer the case, especially in the face of emerging ePayment technologies that allow for structured and standardized remittance information in addition to the submission of remittance data together with the ePayment. These and other remittance capabilities help to change the narrative of the debate between ePayments and paper checks and, in fact, may help move the marketplace toward the day when ePayments are the default.
Download “The State of B2B Payments 2015: Emerging Business Value” today and find out more about enterprise remittance capabilities and the state of payment automation technology in the marketplace.
Check out these related articles for more:
B2B Payments 2015: The Top Three B2B Payment Capabilities
B2B Payments 2015: How Remittance Information Determines ePayment Adoption
B2B Payments 2015: AP’s Top Benefits – Increased Accuracy
B2B Payments 2015: AP’s Top ePayment Benefits — Cost Savings
B2B Payments 2015: AP’s Top ePayment Benefits — Efficient Processing
B2B Payments 2015: Why Supplier Enablement Programs Matter
B2B Payments 2015: The Top Barriers to ePayment Adoption
B2B Payments 2015: How Can Treasury Benefit from Electronic Payments?
B2B Payments 2015: How do ePayments Impact DPO?
B2B Payments 2015: The Top 3 Payment Challenges Facing Accounts Payable
B2B Payments 2015: The Importance of Payment Visibility
Ardent’s Chief Research Officer Discusses New “State of B2B Payments 2015” Report (Video)
B2B Payments 2015: The Emerging Business Value of Electronic Payments
Ardent’s “The State of B2B Payments 2015: Emerging Business Value” is Now Available
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