Chief Revenue Officer at Global PayEX
A new raft of innovators are beginning to recognise the potential for greater disruption in B2B payments, which have long been overlooked in favour of B2C. One of the most neglected areas is that of B2B accounts payable (AP) and accounts receivable (AR).
Global PayEX’s SaaS platform helps businesses improve their AP and AR flows. The company wants to make B2B payments as seamless as paying a utility bill and, because the company is just five years old, it has no legacy tech hangover holding it back.
Implementing Global PayEX’s platform can reduce days sales outstanding (DSO) – the biggest metric in AR. It can also speed up time taken to reconcile a payment, which can then shorten the overall payment cycle and allow customers to place their next order sooner. “That becomes a very powerful revenue acceleration for our clients, and also great customer satisfaction for our clients’ end customer,” Chief Revenue Officer Naru Ramamoorthy explains. When Global PayEX’s platform is fully integrated into a new business, it is capable of saving them between 1% and 4% of their annual revenue.
Solving unique challenges across both AR and AP
The company’s platform can be thought of as two separate ‘halves’, one for AR and one for AP. In accounts receivable (AR), companies face a challenge of electronic invoice presentment, collections, and reconciliation of payments due to multiple incoming formats of payment advices and bank statements. Deductions is a complex challenge – customers have different deduction codes to refer to the same events, whether that’s a goods return, a goods short supply or a withholding tax. Even customers in the same industry have different ways of referring to the same thing.
Global PayEX’s platform enables a customer portal for EIPP (electronic invoice presentment and payment), removes friction in B2B payments, and automates reconciliation to ERPs via auto-read of incoming documents and reconciliation in adherence to corporate accounting rules and deduction classifications. That gives time back to the finance teams, who are no longer faced with the arduous task of having to sift through all this complex data manually.
In accounts payable (AP), the system works like a mirror-image. Vendors can upload their invoices into a vendor portal, and the Global PayEX platform is able to automate the processing of that invoice into the customer’s ERP.
Using data to embed financial services into Global PayEX
Because Global PayEX sits in the middle of so much data, it can bring greater value for its clients. The platform can identify patterns of behaviour and understand how customers pay their invoices. If a customer is late with their payment, the system sends reminders automatically and chases customers for money, all while knowing which patterns of behaviour are out of the ordinary.
Global PayEX is seeking to incorporate embedded finance into its platform by inviting banks and lenders into its digital ecosystem. The platform already knows which of a vendor’s (sellers) or distributors (buyers) have access to financing, because it does the reconciliation for it, so Global PayEX can anonymise that data and send it to partner banks or lenders. That data allows them to make underwriting decisions and provide funding for a certain range of those vendors or distributors.
When a distributor next logs into the customer portal app, they will see that they have a new credit limit of £50,000 or £100,000 from a partner institution. If they choose to accept it, they will be onboarded by the institution in the usual way before being able to pay using that credit for future invoices.
“Banks are interested because they want to offer a differentiated service to their corporate banking customers on receivables and payables,” Naru says. “Banks don't necessarily have these sophisticated technologies, so they use ours.”
Read the full story HERE.
- SEON acquires AML specialist firm to address ‘FinCrime’Financial Services (FinServ)
- Business payments fintech Mail to Pay acquires Belgian peerDigital Payments
- Checkout.com formally partners with B2B fintech ShieldpayDigital Payments
- Global PayEX optimises working capital via AR/AP automation
You can only be successful and impactful on innovation when it’s linked to the mission and strategy of your organisation.