What is Integrated Payables & How can it help your Business?

B2B payments don’t have to be complicated – but they often are. Juggling cross-border payments, a slew of available payment processing options, and keeping all of them straight and error-free across an entire landscape of payment recipients and vendors can take far more time than the seemingly simple act deserves.

But changes in tech are coming for your accounts payable and receivable infrastructure – one of which is integrated payables, which takes the entire mess of payment processing options and streamlines them into a simple, single-source, streamlined workflow.

What are Integrated Payables?

Integrated payables take the entire payment processing ecosystem and tie it into a neat package easily managed by in-house accounting staff or even by a small business’s owner/operator or virtual assistants – it’s really that simple.

Instead of juggling accounts payable and receivable transactions across the full spectrum of available payment options, integrated payables streamline and collate the entirety into a single-source platform through which all payments flow from your business to a trusted third party, which, in turn, “converts” payments to the recipient’s preferred method and disburses on your behalf.

This means you can work within whatever payment processing framework you prefer most while optimizing vendor selection or client onboarding, reducing friction, and saving time.

How Do Integrated Payables Work? 

Instead of manually cutting checks, paying invoices via credit card, or wiring cash, you’ll leverage a single-stream integrated payables portal that pulls payment information from your ERP system or dashboard. Then, your payment goes to the third party managing the integrated payables framework, which, in turn, splits your payment into the recipient’s preferred method and sends it downstream to the final receiver.

The use cases of integrated payables are wide-ranging and generally cover each of the many payment processing options common in B2B transactions, including:

1. Checks, either printed or mailed
2. Virtual cards
3. ACH transfer
4. Credit card
5. Wire transfers

The Need for Integrated Payables for Businesses

Integrated payables’ utility is as wide-ranging as there are types of businesses. Still, integrated payables unlock business time, improve efficiency, and let management focus on what matters, such as product, marketing, and the simple act of making money.

Globalization also means a greater number of transactions are conducted solely online, and the simple fact stands that leveraging integrated payables is the next step in ensuring your business remains at the fore of emerging trends without being left behind to juggle yesterday’s tech and manual payment management.

Types of Businesses that Benefit Most from Integrated Payables

In a nutshell, all businesses benefit from integrated payables. Still, a handful of operational ecosystems lend themselves to generating the most benefit from adoption. These include:

1. Businesses conducting cross-border transactions: Trying to juggle the many means by which you can send money internationally is tough before even accounting for regional regulations or norms that may prevent your preferred payment method from being accepted. Our global world increasingly means your suppliers or vendors may be overseas, so adopting integrated payables early can save headache down the line.
2. Small businesses dealing locally: If you have a longstanding relationship with a local mom-and-pop, they may demand checks for vendor payments, whereas the rest of your payment ecosystem is digital between wire transfers and credit cards. Integrated payables help save time and reduce errors when managing legacy payment tools.

While these are two common examples, the reality is that if your business transacts across multiple payment methods, you’ll save time and even money by pivoting to an integrated payables framework.

Benefits of Integrated Payables

By leveraging integrated payables, you’ll get:

1. Improved cash flow by cutting down on processing and waiting time between invoicing and payment – slashing days payable outstanding half, if not more.
2. Fewer errors since you’re managing payments through a single platform rather than juggling multiple manual methods.
3. More time to focus on your business, not paying vendors while reducing the amount of potential accounting problems you face.
4. Improved vendor relationships since you’re not forced to bicker over the best payment method or use the other’s preferred technique.
5. A more secure payment processing cycle, reducing both fraud and the risk of hacking.

Challenges of Integrated Payables Systems

New systems always come with growing pains, and bringing an integrated payables platform into your workflow is no exception. You’ll have to onboard yourself and your employees to get familiar with the system before you’re able to effectively use it in a time-saving manner.

If you’re running across a series of legacy platforms, or your banking partners are, you may find them unable to accommodate integrated payables systems – that means you’ll have to gut your own framework or do without and (this is the tricky part) get buy-in from third parties and convince them that a pivot is in their best interest too.

Conclusion

Managing the means by which you send and receive payments is a simple task that, when left unchecked, can end taking hundreds of work hours hostage while increasing security risks and error rates. By bringing integrated payables platforms into your payment and operational ecosystem, you can save a ton of time and money while ensuring you’re not left behind as the digital age races forward.