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How Closing The AR-AP Gap Boosts Enterprise Modernization

Digitization has soared to the top of chief financial officers’ priority lists, and as corporates enhance their accounts payable (AP) and accounts receivable (AR) workflows with automation, these modernization initiatives are ushering in a deeper convergence between the AP and AR functions.

“I really don’t think in today’s day and age that you can ignore the AP or the AR digitization question,” WEX Inc. President of Corporate Payments Jay Dearborn said in a PYMNTS interview.

He pointed to recent WEX research that found 72 percent of corporate survey respondents said workflows have become more digitized amid the pandemic. Payments digitization is of particular importance, the respondents said, with Dearborn noting that 86 percent of professionals said payments modernization helps organizations prepare to rebound in 2021 and 2022.

Organizations today can no longer afford to focus solely on the digitization of payments coming in or going out. AR and AP go hand-in-hand when it comes to streamlining financial workflows and improving the experience for third-party buyers and suppliers

This week’s look at the latest initiatives to integrate AR and AP finds new ways to add value by closing the gap between AR and AP, from elevating access to transaction data to promoting further digitization of the enterprise.

Biller Genie Collabs On AR Automation

With a new partnership, AR technology firm Biller Genie is looking to enhance corporates’ control of their finances. The company is integrating its AR capabilities within Xendoo, which offers accounting and bookkeeping solutions, allowing joint customers to efficiently collect, process and reconcile payments from within the Xendoo portal.

While the technology is focused on AR, Biller Genie CEO Thomas Aronica earlier this year told PYMNTS that optimizing AR is key to accelerating B2B payments on the buyers’ AP side. Tackling the issue of late B2B payments, for example, can start with AR processes on the supplier’s end to accelerate invoice generation and make payment acceptance as painless as possible for professionals on the AP end.

B2B eCommerce Brings AR, AP Together

With the rapid digitization of the enterprise also comes an acceleration of B2B eCommerce adoption. As portals that connect buyer and supplier in a digital platform, B2B eCommerce solutions can be a cornerstone in addressing both AR and AP pain points.

Speaking with PYMNTS, PROS Vice President of Commerce Strategy John Bruno said B2B eCommerce tools have the opportunity to address friction on both the buyer and supplier side at the point of payment. That could mean offering custom payment terms to buyers that allow suppliers to more adequately manage and predict incoming payments, or point-of-sale (POS) financing options for buyers that ensure suppliers get paid while buyers have a longer time to settle the bill.

Virtual Cards’ Value Prop

Ensuring corporate buyers can have enough time to pay a bill while also allowing vendors to get paid as quickly as possible may seem like two conflicting goals, but increasingly, commercial card technology is stepping in to meet both of these needs at the same time.

There is another value proposition of the virtual commercial card specifically that can meet the needs of both buyer and supplier, according to Conferma Pay Head of B2B Darren Blair in an interview with PYMNTS.

“What we’re looking to do in the B2B payment space is to not only provide automation to the buyer, but actually provide automation to the supplier end of the equation as well,” he said. “With straight-through processing, which ultimately comes from a buyer-initiated payment, it’s actually delivered straight into the supplier’s bank account without any action required by the supplier.”

In the context of the pandemic, this means corporate buyers can minimize disruptions throughout the supply chain by ensuring capital is flowing to business partners. For suppliers, faster access to capital similarly minimizes disruptions by ensuring they have the funds they need to fulfill orders.

VersaPay, Solupay Merge For AR-AP Integration

PYMNTS CEO Karen Webster spoke with VersaPay CEO Craig O’Neill about the company’s merger with Solupay in an effort to develop a holistic, end-to-end AR/AP payments network that addresses friction of payments coming in and going out.

From the AR end, O’Neill pointed to the importance of closing the information gap of incoming payments to ensure suppliers have access to data about what a payment is for, when it came in, and from whom. Closing this gap means connecting the buyer with the supplier, he said, and in making the buyers’ payment experience more intuitive through data.

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