Unleashing Transparency and Predictability in Supply Chain Payments

How to Unlock Transparency and Predictability in Supply Chain Payments

By Brian Medley • Published June 26, 2024 • 7 minute read

Midway through 2024, businesses have been forced to adapt to an economy that has been – to say the least – very indecisive. Will there or won’t there be a recession? Will the landing be hard or soft? When will interest rates and interest rates trend downwards (in a meaningful way)? These are just a few questions at the forefront of business leaders’ minds. 

For buyers and suppliers, especially small and mid-sized ones, these concerns are more pressing. Over the last four years, they have been forced to adapt to wild fluctuations in demand, labor, and materials availability and cost – all while navigating historical transformation across nearly every industry category. Resiliency has been phenomenal for many of these businesses, but agility has a price. One way that price is typically paid is in access to working capital and cash flow predictability.

Payment certainty and transparency, precursors to cash flow predictability, are woefully lacking across many supply chains. A study of 850 procurement leaders across the US, UK, and Europe conducted by Sapio Research in late 2023 found more than half (52%) of businesses have paid suppliers later compared to 12 months ago due to higher costs and market uncertainty. Late payments have become such a pressing issue that it’s triggered regulatory interest, including the introduction of the European Commission Late Payments Regulation which will require buyers to pay suppliers in 60 to 120 days (with some industry exemptions). 

Meanwhile, payment accuracy is also a key issue, an artifact of non-automated payment processes. The Association for Financial Professionals report error rates for nearly 20% of invoices. According to a survey by the Association of Certified Accounts Payable Professionals (ACAPP), just 5% of AP teams have moved to a fully automated process for handling invoices and payments with partial automation being the status for the vast majority of businesses (70%). 

The factors driving payment uncertainty are numerous and vary by industry and region. They include tighter access to liquidity, financial strains caused by inflation and geopolitical conflict, and antiquated B2B payment systems and processes that are inefficient and prone to errors. In a world where cash flow is king, suppliers of all sizes continue to find themselves on an uneven playing field where not having insight into when an invoice will be paid and if correct payment will be issued has the potential to financially hamstring operations. 

Suppliers Weigh In on the Landscape of Supply Chain Payments

We recently surveyed suppliers to better understand their most pressing business challenges and the state of supply chain payments within their businesses. Cash flow and decreased market demand continue to be the top business challenges with 33% of suppliers citing cash flow as their biggest anticipated challenge over the next six months and 20% citing decreased market demand as their top concern. Interestingly, 18% of suppliers surveyed reported increased market demand as their biggest anticipated business challenge. This too increases the importance of payment predictability and transparent, on-demand payment data.

We also asked suppliers what improvements in supply chain (B2B) payments would be most valuable to their operations – specifically, accounts receivables. Improvements in three particular areas would be “very valuable” according to supplier feedback: visibility into customer invoice approvals (59%), certainty of on-time payment (67%), and reconciliation of payments to invoices and credit memos (60%).

The results of our survey point to three important conclusions:

  1. Businesses need better payment transparency and predictability to confidently make business decisions that will affect their ability to grow and compete in today’s marketplace, especially given the challenges stemming from the current economic climate.
  2. Improved visibility into customer payments could significantly (and positively) impact suppliers’ finances and business operations.
  3. There is an increasing need for payment tools that can help streamline B2B transactions and reduce the administrative burden. These tools can simplify the payment process, reduce errors, and save valuable time for businesses.

Buyers Are Also Feeling the Pinch

It’s not just suppliers that feel the pinch of inefficient B2B payment processes and systems. For many buyers, especially those with global supply chains, paying suppliers on time is difficult and expensive. The volume of supplier payments as well as different geographies, currencies, and regulations make it burdensome to process supplier payments on time. This challenge is amplified by the rapid growth of M&A, consolidation, and disparate systems (particularly across large enterprises). 

The majority of payment processes and systems are outdated, relying heavily on manual effort across AP resources. This is costly to the organization and prone to human error, fraud, and security threats (e.g. bank account validation). Buyers need tools to help them streamline B2B payments and reduce the AP burden across their supply chains. To be effective, those tools must make payments more automated and transparent for all parties involved. 

Empowering Buyers and Suppliers with the PrimeRevenue Supplier Payment Portal

The PrimeRevenue Supplier Payment Portal is a uniquely positioned solution that bridges critical gaps in the B2B payment processes. Since its debut, it has helped suppliers streamline and enhance their payment journey, ensuring precision, timeliness, and minimal buyer intervention. For buyers, it has made dramatic improvements in payment efficiency, accuracy, security, and compliance.

With automated features catering to both on-time and early payments, buyers and suppliers experience seamless transactions with the assurance of secure, accurate and punctual payments. The result? Sharper forecasting abilities, more agile financial decision-making, and greater efficiency as companies gain unprecedented control and insight into their financial operations. Here are some key features that set the PrimeRevenue Supplier Payment Portal apart:

  • Unified View: Buyers and suppliers can access a unified, on-demand view of all supply chain payments, approved invoices, and reconciliation data across all systems.
  • Scheduled Remittance Advice Report: Suppliers can reclaim valuable time by effortlessly receiving remittance advice reports directly to their inbox, eliminating the need for manual retrieval.
  • Find My Invoice: Instantaneous access to specific invoices via a simple search by invoice number.
  • Track Documents: Delve into the status of invoices, credit memos, and early payment requests, granting suppliers enhanced visibility and the ability to monitor their transactional journey.
  • Payment Forecasting: Real-time insights into upcoming payment totals facilitate informed decision-making, empowering suppliers to plan and strategize with confidence.
  • Expanded Reporting Capabilities: Streamlined workflows are realized through comprehensive payment details accessible with just a few clicks.
  • Audit Trail: Uncover historical activity and trace actions effortlessly, enabling thorough investigation with a single click, ensuring accountability and transparency at every step.

The PrimeRevenue Supplier Payment Portal was developed on the principles of payment efficiency, transparency, collaboration, and innovation. Today, it serves as a powerful alternative to traditional B2B payment solutions that do too little to address the real-world cash flow and payment processing challenges facing today’s organizations. And it’s just the beginning. As we look to the future, we are excited for the opportunity to develop and introduce additional capabilities that will improve payment transparency, predictability, and certainty.