Get Paid Faster And In Full: A Guide for B2B Suppliers

Experts from American Express walk us through how with the great global digital shift spurring across P2P, R2R, and other departments in the office of the CFO, automation in A/R cannot take the back seat.
Timothy Batsche

Timothy Batsche

VP, Global Head of Strategic Revenue, American Express
Christopher Gelsomini

Christopher Gelsomini

Senior Client Manager, B2B Payments, American Express
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Session Summary:

Takeaway 1
Why automation is the way to go when it comes to invoice presentment and payment
Key Points
  • Various challenges that you might find your A/R troubled with
  • Reasons why your customers aren’t paying you on time
  • Ways to get your customers to pay you on time
Takeaway 2
Three key offerings that B2B suppliers must ensure in today’s day and age
Key Points
  • Transforming billing and payments process with automation
  • Leverage automation to accelerate payments
  • Build better relationships with customers
Takeaway 3
How a B2B payment system can help suppliers to reinforce their relationship with the buyers
Key Points
  • Automate the invoice delivery process
  • Enable a self-service buyer-supplier portal
  • Accept payments with multiple payment methods
  • Enable an end-to-end highly secure payment portal
  • Conduct real-time reporting
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Christopher Gelsomini 0:04
Thank you. Thanks a lot. How’s everyone feeling after the oxygen and IVs this morning? Good, bad. Okay. So before we get into our agenda today, just wanted to go over a little bit more of an introduction to what Tim and I actually do for American Express, right. So when we say senior client manager of b2b payments, what that means for my day to day responsibilities is I manage a portfolio of 30 accounts in the construction industrial space. These customers are billion dollar plus in revenue, and they’re likely many of your buyers and suppliers alike. And throughout those those portfolios, they account for around $5 billion in charge volume. So we work with them to one just obviously maintain the account relationship and keep a good relationship with American Express. But also to help them through their B2B pain points in B2B needs, right to help optimize their payments strategy. And that’s what we’re going to talk about here when we think automation and how it can really impact the business and help you guys get paid faster as suppliers.

Timothy Batsche 1:03
Alright, thanks, Chris. And hey, everyone, my name is Tim. And, you know, as my bio says, up here, my team manages a group of about 200 merchants, right. And I think one insight I could offer you about that 200 merchants is, you know, in this new world that we’re in about 65%, or 130 of those merchants now offer digital B2B ecommerce solutions to their buyers, right. So that’s up roughly 22% before COVID. And it’s it’s interesting, because, you know, defining B2B ecommerce payments as the ability to fully accept and process a transaction online. Right. So as a point of contact, I think that’s really interesting, because my team is both working on the buyer and the supplier stakeholder side, right. So a lot of the insights we’ll talk to today is within those 200, merchants, sort of how fragmented the A/R A/P processes through the local branches that feed up to HQ, right, I think that’s a conversation we want to bring to life today. And then two, talking through some of the emerging technologies that are transforming those group of 200 merchants that will allow the B2B Digital ecommerce experience such as API’s, HighRadius, A/R, A/P automation, and the impact that they have on the customer experience, because, you know, as we talk through Chris, and I will highlight, you know, in this automation age, the number one skill set now, that’s required in the A/R A/P world, is customer service. I was kind of very surprised about that, like reading through all these McKinsey studies and everything. I’m like, I have to get out of the numbers and actually talk to people. So we went, we talked to our 200 merchants and the office of the CFO confirmed that, really, they don’t want their people managing the circus of manual payments and paper based payments, they want them out there talking to the sales team and making sure credit lines are paid down. They want them out there talking to the different branches in the HQ office to make a tighter line of communication and they want closer relationships with the customer. Right. And that’s what that’s one of the benefits that we’re going to talk about today is when you start to automate, you can actually start having conversations with people that are beyond just exceptions and invoicing disputes and late payments. So those are one of those are some of the things today that that Chris and I are going to walk through.

Christopher Gelsomini 3:32
Absolutely, yeah, it’s all about thinking of how to optimize time and where it can be spent when you’re not bogged down by manual processes. Right. And I think an interesting stat before we get into a poll here is that for companies that don’t have any sort of automation in place for their accounts receivable, those professionals spend 80% of their time, reconciling invoices going through exceptions, disputes, and all of those other day to day tasks that can easily be automated. And with automation, you can get that down from 80 to 5%. But we’ll get into some more of that throughout the presentation. But just want to make sure again, everyone has the instructions to answer a poll, we have a poll upcoming for you guys really want to get your feedback on not yet. But get your feedback on what some of the challenges you’re seeing in your day to day when it comes to accounts receivable and the potential lack of automation. So these are the top four things that we see and we hear when we talk to our merchants. But really curious to get your feedback on which of these four is the most challenging for you in your day to day and I have my opinion on what I think is going to be the number one choice, Tim, I don’t know about you.

Timothy Batsche 4:36
I definitely have one.

Christopher Gelsomini 4:39
So we’ll give you guys a second to get that poll up and running and then we’ll take a look at the results.

Timothy Batsche 4:45
You know, just it’s interesting like talking about until we see the results. I mean, customers don’t seem encouraged to make payments on time. Right. I think that’s no surprise to anybody. And, you know, a story that I can tell you is when I when I was a CFO When we would manage our payments, right, like we generally took an output from our accounting ledger, and we would rank the payments that we’d have to make based on, do we have to make this payment this month? And what’s the pain that we’re going to get through some sort of a dispute process and everything? So we would actually think through which one is core strategic to our business, and which one is going to tie up my office’s resources the least. So let’s make those first. And I think that that ties in nicely to today’s topic.

Christopher Gelsomini 5:32
Absolutely. And based on the results, we’re still getting some votes coming in. But it looks like we got a good amount. Yeah, we do, we do. So we got customers don’t encourage to make seem to make payments on time. That’s perfect, because that’s exactly what we’re going to talk about today. And really the second. The second option was also it’s difficult to accept payments coming in from different formats, right. And that specific bullet will I would like to talk to now because that’s something that we see day in and day out as a pain point for our clients and our merchants, right? There’s been so much innovation on the A/P side of the house, right? There’s been big investments in automation. And those investments have given buyers the power to pay you with 1000 different types of formats, right, you have E payments, you have ACH, you still have the old school cheque, you have virtual cards and the different types of virtual cards that come through your payments portals. And it’s an absolute bear for the merchants have to deal with. And unfortunately, it’s on the burden of the suppliers have to think about how to process those payments. So I’m really interested to see you know where we’re going. So, in terms of what we’re going to discuss today, and as we sort of alluded to, it’s more so about how to build out the customer experience to make it more enjoyable for them, and allow them to pay you quicker, right? Because at the end of the day, we don’t want to make payments a chore, right? Don’t make it hard for your buyers to pay you. So the big focus is going to be how we use automation to drive that new customer experience in the digital age. And really focus on why your buyers aren’t paying you on time. And how automation can help to alleviate that pain point. So here we see a couple of scenarios, right. So this is the first scenario your your billing process is too complex. Right? many instances, buyers don’t want to pay you late, they don’t have a reason to pay you on a Monday instead of end of day on Friday. But a lot of the times they may go to pay their invoice within a portal if you guys have one. And it doesn’t match up to the payment format that they have and are sending to to the accounts payable, it’s incompatible. And instances where there’s international payments, maybe the language doesn’t match up the invoice delivery system is is off port there, the invoice amount is not actually reconciling back to the amount of the product. So you know, again, automation helps with those sorts of processes and things that are holding up the payment cycle. And at the end of the day, you know, you don’t want those disruptions and breakdowns in the payment cycle because that leads to disruptions in DSO, which then leads to disruptions in cash flow. And if you don’t have something automated in place to sort of diagnose and track where the cash is throughout that payment cycle, then we’re looking at a whole lot of problems that I’m sure none of us want to have to deal with. Okay, now we have a quick poll just to think about and just sort of level set where your companies might be in the digital payments are so real quickly, very simple. Does your organization have an online payments portal that serves as a one stop shop for buyers? Tim, what do you think? What’s the breakdown? Of Yes, first? No,

Timothy Batsche 8:33
I think there’s going to be more nose than yeses. But I think, you know, defining an online payment portal as one that could handle the end to end process digitally. That allows your team to outsource those efforts electronically. So again, it frees up time. And I think a lot of these terms here that we’re going to go through and I’ll do my best to to stop myself in defining them. Because I think a lot of these terms means something different to each and everybody right? Like, you know, when we work with our global commercial services sales team, it’s interesting because they’ll they’ll talk about, well, the client, the client, and you kind of have to ask and ask them. Well, who Who do you mean by the client? Right? Are we talking about the buyer, or the supplier or everything in between? And I think when we’re talking about everything between it’s a one stop shop that automates the end to end process that includes exceptions, reconciliation and everything else.

Christopher Gelsomini 9:34
Yeah, that’s absolutely right. So the results of the of the survey, which we could put them up, but two thirds of those who answered the poll, do not have a payments portal for their buyers to go in and sort of service that one stop shop where they can pay their invoices, reconcile the payments that they’re paying to the suppliers and to all of you. So that’s fascinating, right? But just know that you’re not alone in that answer, right? Just because two thirds don’t have it. That’s what we You see also in our day to day, right, like, as Tim said, out of his 200, I’m sure 150 Just are still, you know, having customers pay invoices via email or through a various aggregate of other payment methods. So, and that really comes down to the second point here where, you know, customers are not encouraged to make payments on time. And that goes back to the ease of payment that we were talking about at the beginning of the presentation where, you know, if you’re a buyer and you know that going into this payments or going to pay an invoice is going to be a headache, right? You know, it’s going to be a process, you have to find your card number, or you have to find where the invoice was in your inbox. If it’s end of day on Friday, you might say, You know what, I’m gonna push that off to Monday morning, I don’t want to deal with this right now. But having something where it’s easy to pay just really allows that speed of pay to happen a lot quicker. And additionally, what Tim and I see most often when we speak to our merchants is points one and two, right? So the multiple touch points, we touched on right, just too many confusing areas where a buyer can’t really hone in on how to make that payment. And then lack of transparency about the status of invoice payments is the number one issue that that we see from when we speak to our buyers as well, right? And you know, how many times does it happen, you don’t have some sort of automation in place, and a buyer makes a purchase, and you send them two invoices for the same payment, they pay one of the invoices, they think that they’re good, they’re all settled with you. But on your end, you might have an invoice outstanding, then the next time they go to make a payment, their credit line might not have been refreshed, there’s a lot of confusion and back and forth. Maybe on your side, you sent the buyer an email saying hey, we’re still missing a payment from you. They didn’t see it. Now it’s three weeks later. And there’s just confusion back and forth between the buyer and supplier. Right. And eventually it gets reconciled. But it’s all about the experience that that buyers going through to get that payment on onto their account. Right. So at the end of the day, it’s really just about that streamlining and getting getting that payment in as fast as possible.

Timothy Batsche 11:57
Great, Chris. So I think in these next few slides here, it’s right, how to get your customers to make payments on time, right. So I don’t think there’s anything in the slides that’s too surprising to you. But I think a story that I want to give to bring this to life is how my team consulted with a merchant about fixing a lot of these issues. Right. So I think when people think of these issues, they think automatically to buzzwords like efficiencies and monetizing A/R and I think something that people don’t talk enough about is the balance sheet effects of these solutions, right. So my team consulted with a global national merchant on working capital efficiencies with these solutions. And what that looks like is by automating the payments process, you have more insights, right? So you have the data and analytics to drive the insights. And then the team’s time is freed up talking to the customer. So what we actually found is three of our largest buyers in our global commercial services, we coordinated with a merchant, to actually free up balance sheet, ability to make more payments, right? So if you think about a billing and payments process is too complex, what sort of problems can that do for your organization, right? So imagine if your team can come with a solution that brings the sales team and the treasury team closer together, that’s going to generate a lot of revenue. And what we did with this merchant, is we actually increased revenue from those three buyers by 25%. And we did that by streamlining the payments process. Because if things aren’t done real time automated, how do you know the line size is paid down? So we hear all the time and Chris hears all the time that the sales team is calling the treasury team going, Hey, my buyer wants to make a payment. But they have heard their line of credit isn’t freed up, they made the payment two weeks ago, what gives? And then it becomes this ambiguity between the treasury team and the sales team on how to grow revenue. And I gotta tell you, and every time it pains me to say this, but but treasury sort of loses that, that argument, right? So if you’re automating these things, and you’re freeing up liquidity in the marketplace, you’re driving more revenue for your organization, right? And that means more inventory turnover, and everything so so imagine the year end story, where you’re transitioning from these efficiencies and you’re talking about how your treasury organization drives revenue for the business like that to me is where everybody wants to get to in this day and age is what are you doing to drive revenue? What are you doing to drive revenue? And I think these processes here on how do you get customers to make payments on time? Will you let them know that the payment they sent in two weeks ago is real time applied to their line of credit so they could keep making those purchases. And I think Chris it’s it’s nothing more incentivizing to a buyer to pay down somebody first if the if if the purchases are strategic to their business, and they know they’re getting real time applied. So their sales team is saying, Hey, if you make that payment, you should feel confident that that’s going to be applied real time. And it just transitions, the whole relationships through the buyer and the supplier, and treasury. So I mean, I always like, you know, I’m biased, but I always like to see treasury, as as the heart of an organization, because what you do is so critical, because without you, there wouldn’t be any working capital. And without working capital, there wouldn’t be a sales team, right. So I think these products and solutions come in and help your team drive more results for the organization. Right?

Christopher Gelsomini 15:44
Yeah, absolutely. And I think one interesting tidbit that I picked up from a survey that was done by William Blair, of all of the largest publicly traded companies in 2021, there was about 1.5 trillion of unused working capital that was sitting on those balance sheets, right. So again, think when we think about automation, and we think of some of the main questions, it’s like, what could your organization do with more time to run more strategic tasks? And what can they do with that extra money that’s just sitting unused, to no fault of your own, but there’s just no visibility into where the cash is sitting throughout that payments lifecycle. And it really helps to not only improve the buyer experience, but also you got to think you know, what’s in it for me sometimes, right, and understanding where your cash is, that gives you more power to apply it throughout the organization, and really drive home that revenue. So when Tim’s point about the year end conversation, you now say, Hey, I saved us X amount of dollars that we then were able to apply to this area of the business that drove X dollars in revenue.

Timothy Batsche 16:41
Yeah. And there’s actually a merchant in Chris’s portfolio that we strategically consulted with that we actually freed up working capital by about 30% through these solutions, and that allowed them and their family owned business. So it allowed them to, as our head of treasury said, ship a higher dividend overseas to the family who owns them. So that made him and his team look really good. Right. So I just think there’s a lot of creativity around how the benefits of the solutions can be applied. And I think you really have to think outside the box in terms of like that head of treasury story where he, he was able to send a higher dividend back to the family that made him and his team look really good. The other one is a tighter relationship with the sales team, which increases inventory turnover, revenue margin, that makes teams look really good.

Christopher Gelsomini 17:36
Yeah, absolutely. And I know in the interest of time, I know we’ve talked a lot about automating the invoice delivery process and the importance of a self service buyer portal. So one area that I just wanted to skip through, and this deck will be made available to you guys, but accepting payments from multiple payment methods, right. So obviously, we work for American Express. So we are hearing about the payment pain points and the different variety of payments that buyers have to pay their suppliers. And obviously being able to accept all forms of payments that come in makes your lives easier, and it makes the buyers lives easier, because they don’t have to think about oh, this merchant or this supplier only accepts this form of virtual card or this form of e payable. And I actually wanted to just add an insight from a story from two of my merchants actually, of how difficult they’ve how much of a difficult time it’s been for them to accept virtual cards. So one of them is one of the largest hardware supply companies in the United States, they receive about 14,000 virtual cards a month. And for those of you who are not familiar with processing virtual cards, or though I’m sure some of you are, and most of you are, they come through as a one time email. So if you don’t have any sort of automation to ingest those cards that are coming in, you’re sitting there copying and pasting that 16 digit card number, putting it into your ERP and then having to manually reconcile these payments back because again, they’re just coming through as an email. And so that large hardware merchant that I was just alluding to, they’ve currently hired 30, temps to manually part time to manually apply the payments that are coming in via those emails, right. So again, if you break it down $15 an hour, 10 minutes to process each invoice, we’re talking $45 to process an invoice and again, their hardware and supply company. So they’re selling, you know, hammer screws, nails, their average, you know, payment costs is 30 $30 to you know, $50. So they’re almost losing money on accepting these form of payments. And that’s where automation can really help them. And then another example of how different forms of payments and the you know, automation on the A/P side has impacted buyers. I have another merchant large equipment rental company that was spending what’s him at this at 80 hours a month just dealing with virtual cards. So again, we’re bringing real time examples to you to just sort of show there’s value behind these solutions, right again, 80 hours versus the and including the 30 temps that they had to hire to process all of that volume, it really pays dividends in the long run as you start to start to see the results. The last two things just again from from a risk and data perspective, having these sort of automation solutions in your ecosystem allows you to have less risk to have to deal with, right? When you have a secure end to end payments portal. HighRadius owns the risk for those transactions, right? No customer data is stored on your system. So in the event of any sort of data breach, you know that you have a third party that’s willing and able to step up and handle that and work with you and sort of be the owner and the steward of that.

Timothy Batsche 20:40
Yeah, that’s actually one thing I wanted to talk about with that, Chris, that’s a great point. So if you’re processing through a HighRadius, or gateway, your company never touches the card details or the payment details, right. So as Chris says, if there’s a breach or anything else, that risk is outsourced. So that’s part of the value of these relationships. And the transactions are actually enabled through these keys that are sent over to you to enable the transactions through the electronic invoice portal. So there’s a lot of value there in terms of automation and offshoring, or putting risk off of your balance sheet. And then your team doesn’t have to get distracted to deal with those compliance issues. So it’s a real benefit of partnering with somebody who can offer that gateway capability that’s PCI compliant.

Christopher Gelsomini 21:31
Yeah, absolutely. And then we’ll wrap it up with you know, conducting real time reporting, which I think we’ve talked about at nauseam. But I will share one more story from from that same William Blair survey that really jumped out at me. So there was a large industrial company who did not have any automation in place. And when would the vendor similar to HighRadius to automate their cash applications. So by being able to auto match 82% of the payments that were coming in, that allowed them to apply the cash seven times faster, and because they had automation in place, they were able to see that happening in real time. So what what what the seven times faster really mean? So that automation instance right there, save the company, 160 hours, manual hours that they were doing prior at month close? So again, it shows up in dividends, it’s not going to be instant, I think, as we had we had a speaker yesterday who sort of talked about how it’s sort of a growing into the automation, but it shows up right and it shows up on that balance sheet and it shows up where how and where you can apply the cash. So but I think that’s it, we’re out on time. Appreciate everyone for stopping by. Thank you for listening to us. And if you have any questions, Tim and I are going to be available to answer them. So thank you again.

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