Commercial organisations of all sizes are under continued pressure to improve efficiency and effectiveness. Both accounts payable and accounts receivable functions are critical to efficiently managing these cash flows which are the lifeblood of the business.

This is especially true for business-to-business (B2B) payments which represent the majority of commercial expenditure. Suppliers seeking a condensed accounts receivable cycle as well as improved and more predictable cash flow are providing a growing acceptance base for buyers to depend on digital and card payments as their primary payment instruments.

Although digital payments provide considerable benefits to Australian organisations many have yet to make the switch to realise the potential. This was the finding from a Deloitte survey of 150 medium and large organisations (67% in Australia and 33% in New Zealand) to ascertain key B2B payments metrics and trends.


The results published in the Deloitte report, 'B2B Payments: 2015 Australia and New Zealand Research' indicate that digital account-based payment mechanisms are typically considered better, faster and cheaper by organisations that use them.

This is driven by business process benefits such as improved cash flow, less administration and reduced time chasing payment or reconciling invoices. As well as the speed improvements due to digitisation or reduced approval steps and the cost savings including lower transaction and total process costs.

The research also found that organisations are increasingly driving towards electronic means of payment as well as experimenting with different tools and providers to add value through data analysis and cash flow visibility.

The ability to leverage data moves the accounts receivable function from a tactical administrative processing role to acting as a partner to the financial managers in the company. This shift drives efficiencies in multiple areas including inventory planning and stock supply management, production capacity planning and the optimum use of working capital facilities from banking partners.

By using digital solutions that are focused on working capital benefits such as single use accounts, virtual accounts and payment platforms, the gap between physical purchasing cards and trade finance products gets bridged.

An important feature of the B2B Payments study was the inclusion of the supplier and accounts receivable perspectives as past research has tended to focus on buyers and accounts payable. Among other insights the research identified that suppliers share many of the same benefits from using cards as buyers.


Banks, payment technology companies and fintechs are increasingly working together to bring digital solutions to market to improve the whole process of making or receiving payments.

New technologies, often brought to market initially by innovative fintech companies, are beginning to change the way payments are being made and received.

Businesses and government organisations are increasingly looking to such digital solutions to improve productivity and reduce the time between invoicing and receiving payment. When it comes to being paid 73% of the survey respondents rated faster payment as an important benefit of accepting digital payments, with 49% saying that cards reduced the cost of doing business.

There was a 'but' ...

However suppliers also share the same misconceptions about cards and buyer preferences which can hamper adoption.

Suppliers that accept card-based payments highlighted a number of important benefits, with more than half citing: 
- working capital improvements through faster payment 
- cost savings through reduced processing effort 
- administrative simplification resulting from improved reconciliation.

In addition to these benefits 45% of suppliers reported an increase in sales volume once they introduced card acceptance for B2B payments.

Less tangible but in some cases even more important was the improved customer relationships that could develop through better integration with buyers' processes. Digitising payment processes can provide benefits to both suppliers and buyers but it does require both sides to work together.

While the working capital benefit of card-based transactions has a positive impact on buyers' cash flow, the speed of card transactions can have a more direct and significant impact on suppliers.

Seventy three per cent of the surveyed group cited improved cash flow as an important benefit of accepting cards for payments.

With payments authorised in realtime, and typically settled in less than two business days suppliers have observed better control over their receivables with tangible benefits for the business.

Almost half of the respondents in the Deloitte survey reported a decrease in overall business costs as a result of accepting card-based payments. Electronic payment mechanisms like cards also tend to reduce manual intervention and reconciliation effort. Together with better data and analytical insights this can significantly improve the operational performance which can in turn offset the merchant service fee paid to the acquiring bank.

There was also a perception that buyers 'do not want to pay by card,' which suggests a 'disconnect' with the perspectives reported by buying organisations in the study. In fact, buyers using card solutions wanted to further increase their use, including being willing to absorb some of the cost of acceptance, in return for faster payment such as that through discount.

...the 'but' is being addressed

Suppliers also often viewed cards as a consumer-focused mechanism, indicating that the amounts being transacted were not appropriate for cards. In response to growing demand for large transactions Visa has raised limits, making card-based B2B transactions up to US$10M in value now possible.

Another concern was the merchant service fee associated with a card transaction. This was often regarded in isolation, not accounting for the overall process cost and potential for reducing operating costs, such as staff, postage, stationery and banking fees. Nor did it consider the potential upside of accepting cards on the top line.

There are a number of challenges in implementing and optimising digital payment programs, including the effort involved and initial cost, which can be exacerbated by a limited understanding of benefits.

Like any process and organisational change implementing a digital payment program requires a well-managed effort to succeed. The study interviews indicated that opportunities exist to improve both the initial implementation of such programs as well as the need to optimise their on-going operation.

To assist organisations manage this Deloitte developed a manual of best practices to implement and manage card-based payment solutions. However there is still considerable opportunity to improve take-up with almost half of survey respondents (47%) not using the available solutions and 100% still having paper processes to support cheque payments.

According to Visa, a key technology partner for banks across the region and sponsor of the Deloitte report, the future is about digitising processes and creating an integrated view across a portfolio of mechanisms often through innovative tools developed by fintechs.

Richard Miller is Payments Director for Deloitte. For further information on the report or optimising B2B payments, contact Richard at:

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