B2B ePayments are shifting into more than just a way for businesses to manage employee spending. Consulting firm Deloitte has released new analysis that suggests while companies in Australia and New Zealand are far from achieving the full benefits of digital payment methods in their B2B deals, they are on track to ditching paper.
Deloitte’s Visa-sponsored “B2B Payments 2015 Australia and New Zealand Research” report, published last week, made some not-so-common conclusions about B2B payments in the region: Businesses are starting to get the picture about the benefits of using electronic payments in their accounts payable departments.
In a survey made up of about two-thirds of medium-to-large buying organizations and suppliers in Australia (with the rest based in New Zealand), Deloitte found that the vast majority of them acknowledge how useful digital payments can be.
Rather than paper checks, cards and digital payments methods, the businesses said, can provide efficient spend control services, improved cash flow visibility and reporting in the accounts payable department, and a significant reduction in administrative processing when it comes to procure-to-pay.
An impressive 87 percent of companies said ePayments lead to efficient spend control, while 82 percent agreed that making payments to their suppliers by card is faster than traditional payment methods like checks.
The benefits of ePayments were acknowledged in the accounts receivable space, too.
Researchers found that 61 percent of companies reported spending less effort trying to chase down the payments they are owed, and 73 percent said they get paid faster, citing improved cash flow and the ability to electronically (and thus, more efficiently) deposit their funds as top reasons why they accept cards for payment from corporate customers.
Nearly half (45 percent) of businesses said that deciding to accept cards as payments has increased their sales to corporate clients.
Nearly half of businesses said that deciding to accept cards as payments has increased their sales to…
According to Deloitte Payments Director Richard Miller, the findings are compelling, and provide an optimistic view of the rising sophistication of B2B payments in these markets.
“Businesses and government organizations are increasingly looking to such digital solutions to improve productivity and reduce the time between invoicing and receiving payment,” he said in a statement, adding that the research signals that companies are recognizing the ability of cards and ePayments to provide more than just employee spend management services.
“These virtual accounts and payment platforms mean that a traditional card account can be used for a greater range of B2B payments,” Miller said. “As a result of digitization opening up more opportunities, spending on card-based B2B payments has grown significantly since 2011.” According to Miller, B2B payments made with a card are up 42 percent in Australia, and a whopping 66 percent in New Zealand.
Naturally, Deloitte didn’t miss out on a chance to reveal just how far companies in the region – indeed, across the globe – have to go to fully digitize their payments and rip up those paper checks.
“There is still considerable opportunity to improve take-up,” Miller said, adding that nearly half of companies surveyed (47 percent) are not using ePayment solutions available to them – and that 100 percent of companies said they still support paper checks in their accounts payable and receivable operations.
For Rob Walls, who is Head of Product for Visa at its Australia, New Zealand and South Pacific operations, the next steps for pushing buyers and suppliers in this region – at least for Visa – will be to strike more partnerships with the FinTech community to make cards and ePayments more available to corporations.
“B2B payments are rapidly changing as the shift to digital accelerates,” he said. “There is still substantial opportunity for businesses of all sizes to adopt more efficient ways to pay and be paid.”