To borrow from Robert Frost’s “good fences make good neighbors” quote, it would seem that good payments make good partners too. That is to say, the more connected and collaborative two business partners are, the more lucrative, seamless, and secure their trading relationship will be.
Digital payments collaboration between trading partners has improved during the pandemic and strengthened the workflows between accounts payable (AP) and payroll.
To that end, in a panel discussion moderated by Bob Solomon, CEO at Software Platform Consulting, Vacasa Chief Financial Officer Jamie Cohen and TD Bank Head of Corporate Products, Services and Innovation Jo K Jagadish said that advanced technologies are helping smaller and mid-market firms on either side of B2B transactions improve relationships, communications and, ultimately, cash flow.
As noted in PYMNTS’ own research, 74% of SMBs generating between $25 million and $100 million in annual revenue experienced delayed payments volume because of the pandemic, for example, and 37% said it increased the cost of accepting payments.
Read more: New Data Shows Two-Thirds Of SMB CFOs See Payments Innovation As Key To Growth
Cohen noted that her two-sided marketplace, operating primarily in North America, allows guests to find and book vacation homes and vacation rentals and helps homeowners market and optimize revenue for rentals. The properties on the site number 30,000. The platform pays the homeowners and also pays vendors that help manage and maintain the properties.
At a high level, Jagadish noted that accounts payable and receivable departments have become more determined to digitize operations through the pandemic. In many cases, firms that had to shutter their physical locations had to pivot to digital channels to optimize their payments, receivables and reconciliation capabilities from a remote, work-from-home environment.
Against that backdrop, she said, “the effectiveness of digital tools became paramount” – but the trends had been in place even before the pandemic. And banks, TD among them, invested in AP and AR capabilities for small businesses — whether through build, buy or partnership strategies (sometimes all three). Jagadish pointed to TD Online Accounting, a tool that allows clients to send out electronic invoices and get paid, sometimes within the same day.
See also: TD Rolls Out Online Accounting In Bid For Small Biz Accounts
Vacasa’s Cohen noted that though the pandemic hit the vacation market hard, an “enormous surge” of demand has come as economies have reopened. One marked seismic shift has come with payments — Vacasa has been actively investing in what Cohen termed a “procurement transformation,” with a new procure-to-pay system that will digitize up to 85% of payments on the platform and will allow for self-portals to be established so that small businesses and contractors will be able to onboard and track invoices. This will cut a number of manual processes, emails and even phone correspondence. Those types of collaboration and communication, said Jagadish, can be strategic in nature, improving the lifetime value of relationships — which in turn directly impacts bottom lines.
Successful collaborative relationships leverage the power of data and networks, Jagadish continued, taking into account suppliers\’ preferences and discounts for early payment while automating and streamlining the collection of card details and other information. Referring to the “sanctity of data,” she said firms must ensure the information is protected from scams (business email compromise schemes among them) and hackers.
With a nod toward the two-sided marketplace, Cohen said Vacasa is building tools to help give parties visibility into their earnings. The company just released its homeowner’s app, which enables property owners to see monthly statements of the revenue generated — “but ultimately, we\’d like to get to the point where they can see their daily proceeds, so that anytime they open the app, it\’s automatically updated,” she said.
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Looking into 2022, Cohen said the focus would be on leveraging data to help make more efficient purchasing decisions tied to the supplies needed to maintain properties and help suppliers gain more visibility into earnings and how/when they will receive their funds. TD, said Jagadish, will automate solutions to help clients manage back-office functions.
“End-to-end accounts payable automation is incredibly important, and something we\’re going to continue investing in,” she said.
NEW PYMNTS DATA: DIGITAL BANKING STUDY – THE BREWING BATTLE FOR WHERE WE WILL BANK
About: Forty-seven percent of U.S. consumers are shying away from digital-only banks due to data security worries, despite significant interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can shore up privacy and security while offering convenient services to satisfy this unmet demand.