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Futuristic B2B Payments: Virtual Cards, ACH and Accounts Receivable Challenges 

When looking into the future, change can be scary and exciting. It’s uncomfortable, and yet, by enduring the process, we adapt and change just as our businesses. B2B payments are evolving from paper checks to electronic payment delivery. This paradigm shift from paper checks to electronic is creating a new timeline for payment delivery.

Virtual cards, also known as Single-Use Accounts (SUA), are among the latest in payment technology. With risk mitigation a priority, virtual cards (VCard) auto generate a onetime use credit card number then sent to each supplier as a “one-time” use payment. The payment is sent, and that unique VCard number is active for a set number of days, never to be seen again. The Virtual Card payment option immediately increases security around your payment process, decreasing chance of fraud and increasing efficiencies.  The Virtual Card technology immediately gives control over the A/P Departments visibility and control. The automation reduces human error and increases efficiencies.

Accounts Receivable Automation - B2B Payments - Accounts Receivable Solutions

Automated Clearing House (ACH) payments are on the rise. According to NACHA, by 2020 66% of B2B payments will be made electronically. In addition to the VCard, Automated Clearing House (ACH) is expected to account for 45% of payments while checks are declining to 35%.  In addition, Credit Cards will account for 12% and Wire for 8%.

“The big growth in ACH payments anticipated by credit and receivables professionals, in just three years, is truly significant,” said Rob Unger, senior director of corporate relations and product management for NACHA. “It demonstrates the growing importance of ACH payments to support the evolving needs and goals of businesses. Because they are electronic, allow for remittance to be sent with the payment in a variety of formats, are more cost-effective than other payment options and can be received quickly, ACH payments are becoming a very attractive option to both accounts payable and accounts receivable professionals."

With this initiative, Executives are experiencing more consistent processes and improved cash flow management. The increased visibility is equipping Executives with a better flow of information for decision making. These positive changes in the payment environment are creating a bottleneck in the Accounts Receivable Department. The increase in remittance data is creating a manual input bottleneck, or in some cases incorrect remittance data sent alongside the payment. Some short term solutions are; outsource the manual inputs of remittance or bench A/R Staff to assist in seasonality when an increase in payments occur.

FinTech companies have unlocked this manual data input through leveraging Artificial Intelligence. Once the remittance email is received, the AI platform opens it, extracts the requested data, then organize it in a structured, downloadable format. A major competitive advantage is it's a scale up and scale down solution to remittance data, rather than facing the tough decision to outsource or bench A/R Staff when seasonality occurs.

There is a bright future for financial technology. FinTech is changing the way we do business around the world. Companies like ours offer payment automation services that help create a more diversified banking relationship. By reinventing the way payments and invoices are processed and lowering the cost of supply chain procure-to-pay procedures, a more cost-efficient and less labor-intensive procedure for generating seamless payments and processing invoices is created. 

Updated on 11/21/19.

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