In food and drink, a delectable balance of sweet and sour is desirable. Not so in business-to-business (B2B) payments, as the sour represents things like continued prominence of checks and costly manual processes. With so many sweet options available today, such as technology advancements and growing electronic payments, it is time to turn the sour lemons into lemonade. The sweet are getting sweeter and, unfortunately, the sour might never transform. I saw it all this month while analyzing responses to AP Now’s 2016 Payment Survey. Here is a sampling of what I learned.
Preliminary Payment Survey Results
A decent percentage of organizations now use checks for less than half of their B2B payments (sweet!) and they all aspire to drive their success further. Sadly, for a larger percentage of organizations, checks still comprise at least 75% of payments. (The rest are in between.) Among these heavy check users, nearly half are satisfied as-is.
As for Commercial Card usage, sweet and sour again emerge. Most organizations have Purchasing Card programs in place and the prevalence of electronic accounts payable (EAP) solutions is in double digits. However, strategies for increasing card usage are generally lacking. This might be a reason for the nearly equal split between those reporting little to no change in card usage in 2015 (compared to previous years) and those noting higher usage.
For more information about the research, please refer to the press release from AP Now.
Where are We Headed and Why?
In the past year, I have had the opportunity to analyze data from a few different industry surveys. I’m sure I’m not alone in seeing a widening gap between organizations who are basically building sweet state-of-the art lemonade stands with efficient purchase-to-pay practices and those who have failed to progress. Why?
Sweeten a sour payment strategy through greater use of technology and electronic payments.
Survey results have shown that success is not limited to the largest organizations, so the difference could be knowledge. A lack thereof also likely fuels resistance to change. Through the AP Now survey, I saw firsthand that many organizations lack internal knowledge, as in their internal payments-related costs. For tips, see last month’s post on rating your payments strategy and building or refining a metrics plan. Internal knowledge is a good starting point, serving as the catalyst for change.
Then there is industry knowledge. Take advantage of the multitude of options, such as subscriptions to content, research surveys, webinars, and provider technology demonstrations. Of course you cannot do and read everything, but you will gain exposure to what is possible.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…
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