Over the next three posts, we’ll be discussing progressive business-to-business (B2B) payment trends and their effect on finance and accounting departments within the hospitality landscape and beyond. For the first installment, we’ll be taking a deep dive into recent developments in payment automation technology and what we can expect to see in 2019.
FinTech is Stepping up to the Plate
The B2B payment landscape is undergoing a massive shift as B2B payments continue to increase over time, and big names have their eye on this ever-growing payment segment. Several small FinTech companies have caught on to this trend and have set out to alleviate the stress of employees within finance and accounting departments across the globe who handle B2B payments daily. A main focal point for FinTech is payment automation and the promising opportunity that lies in cutting manual and tedious labor for financial professionals.
Automation can speed up processes and greatly decrease the amount of labor-intensive tasks necessary to facilitate payment. With the rapid change of payment processes, enhanced payment technology is quickly replacing antiquated and outdated methods, and accounts payable automated solutions are popping up everywhere. B2B payment interactions have historically been a high pain point, constantly lagging behind consumer payment technology. Therefore, reliable technology that will lessen the burden for both sides of B2B transactions is in high demand, and automation is set to make payment more efficient and accurate than ever before.
Why is Payment Automation on the Rise?
Automated payment has major cost-savings potential for businesses of all sizes. The B2B payment process classically demands countless manual interventions to resolve error and update information, which drag the process out much longer than necessary, often delaying payment or allowing for more error. New automation payment technology eliminates unnecessary steps, optimizes efficiency, and provides far-reaching benefits. It also allows invoices to be paid in one day versus up to two weeks or longer for traditional payment processing.
Automation isn’t just for the big players. In 2019, we can expect to see FinTech solutions for small- to medium-sized businesses (SMBs), which will benefit suppliers as well as other companies in the financial landscape. Although small businesses produce less frequent invoices, more and more FinTech companies are showing interest in the SMB market, which incorporates around 5 million businesses, a growing revenue stream that can no longer be ignored by financial tech companies.
How 2018 Automation Trends Set the Stage for 2019
According to Automation Anywhere co-founder and CEO Mihir Shukla, payment automation has reached an inflection point. Automation Anywhere, a company that automates B2B payment tasks, was valued last year at $2 billion with fundraising from several big names, including Goldman Sachs. The company’s high valuation gives further legitimacy to the demand for accounts payable automation and its position as a key strategic driver for any business. Digital native companies, those companies adopting by younger generations who mainly purchase online, are demanding automation, and their demand has sent a message: If businesses want to keep up with the digital age, they cannot put off adopting automation.
Other big businesses, like Mastercard and Kodak, are actively embracing automation in hopes of winning new business and finding easier ways to pay suppliers. In November, Mastercard partnered with MYOB, an Australian software company that serves small businesses. The merger will automate management of supplier invoices and payroll. In lieu of manually entering payment details, business owners can now use credit or debit cards to facilitate same-day payments to suppliers and employees allowing small businesses to financially embrace automation at the same rate as midsize and large businesses. Extending these services to small businesses can have a large impact on the business’s success and their competitive advantage for years to come.
In the same month, Kodak announced their partnership with the automation software firm, CoreIntegrator. Together they developed an automation payment tool called A/P One, which automates invoice registration and data entry, verifying employees to access invoices in 24 hours. A/P One not only saves money on infrastructure and licensing costs, but successfully completes transactions faster with little to no error.
What’s in Store for Hospitality
In the world of hospitality, manual tasks that automation solves go well beyond payment. The mundane and repetitive undertaking of tracking reservations and commission rates for transient and group travel can swallow up precious time for both agencies and hoteliers. Because of this, Onyx CenterSource has developed a platform that can be used to resolve issues within the hospitality B2B payments space. If payment technology can relieve employees from monotonous to-dos, personal time and energy can be spent working on more complex tasks that can’t be automated. Timely management of accounts payable is crucial to the success of any business, as it impacts vendor relationships, cash flow, and security against fraud.
To combat the manual tasks associated with groups, meetings and events payment for the hospitality space, Onyx launched GroupPay in 2018. GroupPay is an automated system that efficiently tracks, processes and reconciles payment for the events industry. The system consolidates meetings and events data in one location, tracks real-time reservation status, logs consumed stay data, and records outstanding commission payments, providing event planners and hoteliers with the most transparent payment product in the events industry.
Have you automated your accounting tasks? Let us know in the comments.