When Charles Darwin popularized the term “survival of the fittest,” he never could have anticipated just how prescient it would be for businesses over 150 years later. During the past two years, companies have come face to face with a new reality — embrace the change that’s afoot in the marketplace or risk losing out to your competitors. This new reality is especially acute for how companies manage accounts payable (AP).
The onset of the pandemic brought about remote working en masse. Seemingly overnight, a host of companies that relied on physical checks took drastic measures such as sending check printing machines home with their employees to ensure business didn’t grind to a halt. And for those AP departments that were already considering digital payments, this was the catalyst for finally making the shift.
The shift to digital payments
Digital payments hold a special allure for companies that want to work more efficiently and intelligently. By having payment data centralized, digitally accessible and auditable, businesses have the power to extract data, analyze it and get better insight into their vendor relationships. For example, as you think about how to improve operational efficiencies, you may want to consider which vendors you are working with the most and whether you can negotiate a vendor discount.
“We’re finding that companies of all sizes are more interested in digital payments,” suggests Lindsay Huston-Herbst, head of B2B Payment Solutions and Card Product Management at Bank of America. “In the past, maybe the hurdles were too large. But the combination of disruption resulting from the pandemic, access to better technologies and a greater ease of integration with companies’ existing platforms have made the idea of digitalizing payments more appealing and less overwhelming.”
The obvious benefits notwithstanding, companies cite several barriers keeping them from making the leap — including vendor adoption, the perceived costs and concerns over the ease of integration.1 Fortunately, the obstacles are decreasing with each passing day, especially as more financial institutions partner with fintechs.
“Through our own partnerships with fintech providers, we have seen tremendous changes in the last two years. The shift to digital has become simpler and the rate at which we can convert customers to a digital system is only increasing,” says Huston-Herbst.