As your business evolves, the way you pay and get paid will change too.
After all, cash flow is the lifeblood of any business.
Against this background, There is a more widespread tendency In the FinTech industry, innovative solutions are transforming the traditional landscape of accounts receivable (AR) and invoice finance.
There are three main factors impacting the modern B2B industry: Ben WeinerSenior Vice President and Global Head of B2B Payments NubayHe told PYMNTS that the reasons for this include continued high interest rates, the growth and challenges facing small and medium-sized businesses (SMBs), and growing interest in alternative capital in the fintech sector.
Weiner explained that higher interest rates are narrowing the gap between the prime rate and alternative capital annual percentage rates (APRs), making such solutions more attractive.
At the same time, small businesses are growing but struggling to access unsecured credit and are driven by “often unrealistic” needs for efficiency. Summary, These realities have led to the concept of alternative capital gaining attention.
“This started with the BNPL (buy now, pay later) boom on the consumer side and is slowly starting to seep into B2B payments,” Weiner said, noting that high interest rates and inflation are putting a lot of strain on businesses., At the same time, buyers are “effectively driving the balance sheet” of suppliers.
He explained that many smaller suppliers are “caught in the middle” between larger B2B buyers who not only set the terms but often also pay beyond them, creating “weird cash flow dynamics” for suppliers.
Suppliers are fighting back and seeking the right tools to help them improve the certainty and speed of turning cash onto their balance sheets.
Read also: Nuvei launches invoice financing service integrated with major ERP system
Leveraging AR innovation to enable business continuity and growth
Solution for In this issue, Nuvei in April State-of-the-art Invoice Finance Solution Aimed at improving merchants' cash flow. Invoice financing gives businesses access to cash within 24 hours by converting unpaid invoices into instant working capital. Also Strengthen Cash flow with one-click financing integrated into your Enterprise Resource Planning (ERP) system.
“Our mission is to balance finances,” Weiner says. “We want to give our suppliers the tools. regain Control the balance sheet
He presented an ideal use case of a small business supplier receiving a large order with extended payment terms from a key buyer. The supplier is faced with multiple financial obligations and growth opportunities that require immediate funding.,but, Our innovative built-in invoice finance solution allows suppliers to fund invoices at competitive rates within their existing accounting processes, ensuring business continuity and growth.
Weiner explained that by embedding invoice finance solutions into supplier ERP systems, modern solutions ensure seamless integration and ease of use, solving previously difficult pain points for companies. I've been relying on you They rely on external, often unwieldy, funding solutions.
Across B2B industries, technology and automation are I'm playing more and more It plays a key role in transforming the AR process. by Drive PO-to-cash efficiencyCompanies can accelerate growth and improve profit margins. Innovation in AR automation, Facilitate partial payment exchanges, eliminate manual processes, etc.helping Enterprise Streamline operations and reduce friction.
“It's important to remember that AR is sales, and if executed effectively from an automation perspective, it should help drive growth and increase profit margins,” Weiner says. “Funding more orders or larger orders, and making business decisions faster while eliminating manual processes like three-way matching” are all immediate benefits of adopting AR automation.
Continued Innovation in Accounts Receivable and Invoice Finance
Looking to the future, Weiner identified two things. key Innovation area: Expanding the total addressable market for invoice finance and leveraging artificial intelligence and machine learning.
The next step is funding at the pre-invoice stage, such as PO financing, which may attract lenders with higher risk tolerance. moreover, AI and machine learning can provide predictive insights to help suppliers identify financing opportunities and optimize cash flow strategies.
“Failing to modernize isn't really an option,” Weiner says. “You might say, 'All my customers pay by check,' but you know an effective buyer portal can help lower that. You might say, 'The cost of accepting credit cards is too high,' but you know the total cost, when you factor in the time, effort and uncertainty, can change that calculation…The real question is how many vendors are involved in your ecosystem and technology. Do you need point solutions or something more comprehensive?”
“The common thread, at least for suppliers, is smarter decision-making, greater efficiency and working capital management,” he added.
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