As the world around us becomes more digital, so do the way we make payments. Even the way consumers manage money has moved from traditional channels, such as cash and paper checks, to digital methods like credit cards and online banking. But there is one area of business that is lagging and that is in the B2B industry.
Paper Checks vs. Digital
Even though B2B companies are realizing that the most secure and effective way to accept transactions is to move to electronic payments, paper check usage for B2B commerce has actually increased in recent years.
Which is surprising given the vast majority of B2B organizations report that checks are still the most targeted method of fraud. According to the Association of Financial Professionals (AFP) in their 2016 Payments Fraud Survey, 71% of companies surveyed have reported experiencing some form of attempted or actual check fraud.
And businesses are learning that digital payments are a better method to combat speed and efficiency problems associated with paper checks. They have also shown to reduce the cost of mailing and processing paper checks by switching to a simpler, automated workflow for domestic and international invoices.
Challenges Businesses Face
So why haven’t B2B companies done more to steer their payment systems away from paper check and move toward digital?
One of biggest challenges facing these companies to today is fragmentation. Account payables, account receivables, reconciliation and other corporate finance departments, are weighed down with the process of moving to a fully-automated and digital mechanism to process electronic B2B payments.
Alternatively, some business owners just aren’t interested in changing. Rooted in traditional methodology of ways to conduct business still holds fast. This is the way they have been doing it since they opened their businesses decades ago and certain habits are hard to break.
The Light at the End of the Tunnel
Despite the slow move to electronic payments, there is some hope. With same-day funding gaining momentum, organizations are slowly starting to trend away from accepting paper checks.
As the adoption of digital methods in the B2B arena accelerates, there is reason to believe that the dependence on paper checks and manual account processes will decline over time.
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