There’s an old quote that says, “There are decades where nothing happens, and there are weeks where decades happen.”
That adage can certainly apply to the first half of 2020, when the COVID-19 pandemic changed economies and digital habits almost overnight. Traffic spiked suddenly on digital platforms as people worked, socialized and conducted commerce online in greater numbers than ever before.
While the pandemic accelerated digital trends that were already happening in the B2C world, it also presented a chance in the B2B payments space to revolutionize processes long overdue for modernization. Even today, accounts payable (AP) departments are dealing with paper-based and manual processes. TD Bank is committed to helping mid-market companies create more efficient and productive B2B payment practices.
Digitizing manual & paper payment processes is a top priority but requires investment
Finance departments realize that AP processes need to be modernized and have a keen desire to do so. There is a clear opportunity to realize cost savings and efficiency gains by reducing manual and paper-based functions. In fact, according to the 2019 B2B Payments Survey, 60% of respondents ranked manual payment generation as a top operational challenge, second only to security concerns.
Meanwhile, according to the 2019 AFP Electronic Payments Survey, 46% of middle market companies’ B2B payments continue to be made by check. In the same survey, 47% of respondents cited cost savings as the top benefit of using electronic payments, followed by fraud control at 42% and better supplier relations at 38%.
Still, there are obstacles to modernization. These include vendor resistance to electronic payment adoption, difficulty meeting vendor requirements for electronic remittance delivery and the technological challenges of implementing electronic payments.
Internal resources must also be deployed. For example, banks must appropriately authenticate suppliers’ requests to change bank account details for ACH and wire payments. It takes time and human capital to authenticate these requests to avoid being the victim of a fraud attack seeking to redirect payments.
There are also strict security controls that must be met with B2B payments, such as securely storing and managing your suppliers’ bank data to prevent a breach and having proper fraud measures in place.
Smart businesses are now devoting the time, resources and capital toward streamlined, digitized payment processes.
Digital payments deliver multiple benefits to make AP departments more efficient
Middle-market companies are in a unique position. Generally, they don’t have access to the big tech budgets of large global companies to build their own systems. At the same time, they have more complex internal processes than small and micro businesses.
TD Bank’s solutions for middle-market businesses—including the TD Integrated Payables product, Paymode-X—help modernize and digitize AP systems without a costly or lengthy implementation process.
Here are just a few benefits: