Frustrated by too many failed B2B payments? You’re not alone

Failed B2B payments can be disruptive in areas beyond cash flow. For instance, if your bank has to repeatedly put in extra work to process ACH payments, there’s a chance they could stop making the necessary changes to pay files and file a complaint with Nacha.

Seven out of every 10 businesses and financial institutions around the globe are unsatisfied with the rate their payments are failing to go through, according to a recent report from LexisNexis.

And no wonder – the average global straight-through processing rate is a rather unimpressive 26%.

Direct, indirect costs of failed B2B payments

Ninety-five percent of the surveyed respondents said there was either some negative impact or a severe impact on their A/P staffers’ workloads as a result of failed B2B payments, such as extra time spent reconciling vendor accounts and re-issuing payments.

A separate survey of your peers at companies in the UK by A/P fintech provider Medius revealed how much business relationships can suffer when payments aren’t made as promised: 59% said their vendors had reduced or stopped discounts because of late payment and 55% claim a business had refused to work with them again.

Then there’s the pain point of direct costs of failed payments. The average fee incurred per failed B2B payment is $12.10, according to LexisNexis. When combined with accidental duplicate payments if a supplier sends a second invoice for the same bill, multiple unsuccessful payments can erode profitability.

In a climate where your business needs its money to work harder than ever, failed B2B payments need to be minimized.

A/P automation can help

The LexisNexis report also found that 72% of finance teams are still manually checking bank beneficiary name and address details and banking information, which involves data entry error risk and creates friction in payment processes.

Automating company payables with AI-enabled technology is cost-effectively opening up opportunities to reduce manual touchpoints; reduce unnecessary costs from failed B2B payments; optimize end-to-end payments efficiency; and even deploy more accurate rich data for cross-border payments, which can be subject to problems with International Bank Account Numbers, Society for Worldwide Interbank Financial Telecommunication codes or Bank Identifier Codes that can prevent payments from going through.

Modern payment solutions on the market pull data from your enterprise resource planning or accounting system to create payment files. The automatic forwarding of data eliminates manual data entry and reduces potential problems with vendor payments.