American Express has outlined the top five business-to-business (B2B) payment trends to watch for in 2021. The trends include topics such as eCommerce and security, along with ways to improve overall cash flow and the relationship between the buyer and seller. Although these trends can be partially attributed to the normal changing of technology and business, they have also been sped up by the global health crisis from 2020 which caused many companies to move to a more digital payment experience for both themselves and their customers.
When it comes to accounts receivables specifically, American Express found that the three main challenges B2B organizations faced when managing their AR were manual processes, slow processes and operating costs. Therefore, one of the biggest trends that is expected to increase in 2021 is payment automation.
Automating accounts receivables helps with reducing manual labor, as well as speeding up the collection cycle. Having a quick and easy collection cycle encourages customers to pay on time, which became more important to businesses in 2020 because they relied on having cash on hand. According to American Express, businesses that were relying on manual AR processes were seeing 30 percent longer days sales outstanding (DSO) averages than businesses who were relying more on automated AR processes. With manual AR processes, companies are having to spend more time doing repetitive, tedious tasks, resulting in less time proactively engaging with customers.
Review all of the expected payment trends here: https://www.americanexpress.com/content/dam/amex/us/merchant/pdf/b2b2021trends.pdf