Consumer payments have been digitized to such an extent that most people have come to expect that every single transaction they make will be easy and instantaneous. Simply pull out a card and scan it, take out your smartphone and click a button — or better yet, just tap it against the terminal — and it’s done.
Those same expectations are also becoming increasingly prevalent in the business world, and it’s no longer enough to simply send your suppliers a check and be done with it. These days, many businesses are placing a greater emphasis on building relationships with customers that make it easy to get paid with a minimum of fuss, creating big demand for payment automation in the world of business-to-business (B2B).
“If a vendor has to jump through 15 steps just to get paid a month or two later, and they compare that to an instant payment from a friend with Venmo in their personal life, it’s an obvious source of frustration,” said Ted Tekippe, head of payment strategy and operations at intelligent payment automation firm Scrypt.
In fact, the situation may become so frustrating that businesses will avoid dealing with clients that don’t make it easy for them to get paid.
The solution, of course, is automation. Tekippe explained that traditionally, companies have had to devote a lot of manpower to accounts receivable — and that in some cases, he has seen clerks take as long as two hours to process a single payment. However, he said Scrypt’s software can reduce that to as little as 10 minutes, thanks to a large dose of artificial intelligence (AI).
“Scrypt is able to take a paper check, scan it, read it, process it and then deposit it in the correct bank account,” Tekippe said. “If a client has multiple bank accounts, it knows where to deposit the money, which account to credit, etc.”
Automation not only reduces the average cost it takes to process an invoice, but also cuts days sales outstanding, thereby helping to strengthen business relationships.
As Tekippe explained, businesses are no different from people in that they want to get paid faster without having to jump through hoops. So, if a company can make that process quick, easy and more streamlined, their suppliers will be keen to build on that relationship.
“Every business has different priorities and needs to decide where to focus its resources, and they like to do business with people they have positive relationships with,” he added.
With less hands-on work for the accounts staff to deal with, companies can devote their efforts to higher-value activities that bring even more revenue into the company.
Tekippe predicted that payments automation will bring more advantages in the future, likening it to the evolution of GPS navigation. When he first began driving, he’d have to struggle to find his way with a thick map book in his car, flipping through pages and often getting lost.
Then, MapQuest arrived, making it easy to plot your route on a computer and print out turn-by-turn directions. It was a big improvement, he said, though still not perfect due to its reliance on static data sets.
With the rise of apps like Waze and Google Maps, we can now use real-time, crowd-sourced data on road traffic, construction work and police speed traps to calculate the fastest route in real time.
“Now, Scrypt is also using broader, more dynamic data to improve the effectiveness of automation in payables,” Tekippe said. “And we’re going to see this extend into smart payments, which will automatically help companies take advantage of early payment discounts, better manage cash flow and provide cash back to businesses when they can earn revenue share on interchange rebates.”