Although accounting automation might already be a familiar concept, today’s fast-paced business environment has transformed it from a luxury to a necessity. Increasing labor costs and the accelerated pace of business operations leave leaders with little choice: automate or face failure. A significant 90% of small to midsize businesses view automation as crucial for enhancing financial operations and efficiency, while 89% of executives intend to increase investments in AR automation and payment technologies. What’s more, if your organization uses Salesforce, you can integrate an accounting application, like Accounting Seed, and get started immediately.
The concept of embedded finance, which involves managing payments directly within accounting software, is rapidly gaining momentum in the B2B sector. Traditionally, money movement and related processes occurred outside the core accounting system, leading to manual entry, errors, disconnected data, and poor decision-making.
By integrating these functions into the accounting platform, businesses can automate numerous tasks. For example, when a customer makes an online payment, the system can automatically reconcile the payment with the bank account and general ledger, eliminating the need for manual intervention.
The potential impact is substantial, with B2B payment volumes reaching an astounding $27.5 trillion, and AP and AR making up 90% of that amount. Despite the massive market, embedded payments currently represent only a small fraction of existing B2B payment volume.
However, with steady growth expected and the advantage of open APIs reducing integration efforts, Bain predicts that B2B embedded payments will quadruple from $0.7 trillion (2.5% share) in 2021 to $2.6 trillion (7.8% share) by 2026.
Many business owners and finance leaders are not yet familiar with the available options for implementing embedded finance solutions and automating core accounting functions. A significant challenge is that many companies still operate their CRM and payment tracking systems separately from their core accounting platform. Furthermore, 71% of businesses that have not adopted a more automated AR system cite a lack of understanding of available technologies as a barrier.
To address these challenges, we will outline a clear path for freeing up valuable accounting staff time and company resources with the right solution.
Getting Paid Faster: The Goal of Every CFO
As you strive to deliver quality products or services, ensuring timely payment is crucial. This aspect of your business should not be neglected. Currently, your AR process might look like this:
- A significant amount of time is spent manually recording customer payments.
- Upon receiving a payment, you manually match it to the customer billing to identify the associated invoice.
- During bank reconciliation, you manually align these payments with transactions from the bank.
- If a payment issue arises, there is no dedicated customer service to handle it effectively.
This situation can lead to several issues:
- Overworked staff are perpetually behind. A survey of CFOs revealed that 77% of AR teams are lagging, with 22% reporting they are months behind.
- The team loses track of payments, resulting in inaccurate records, duplicate payments, or missed payments.
- Late payments from customers, which affect nearly 90% of businesses, hinder business growth.
- In the event of payment issues, there is no reliable customer service to address them promptly.
If you’d like to explore how easy it is to integrate an accounting application, like Accounting Seed, with Salesforce, contact us – we’ll get you started immediately!