This e-book shows 4 major reasons why CFOs need to change their B2B payments strategy and Explore how digital payments enhances Sage Intacct’s payment capabilities.

1. 4 Reasons Why CFOs Need
to Re-think B2B Payments

2. 4 Reasons Why CFOs Need to Re-think B2B Payments| 2
CONTENTS
Chapter 01 About
Chapter 02 Reason 1: B2B Payment Methods and Invoice Processing
Chapter 03 Reason 2: Time-To-Cash
Chapter 04 Reason 3: Customer Experience
Chapter 06 Why add Digital payments?
6.1 Reduced Payment Processing Time
6.2 Diminished Administration Expenses
6.3 Improved customer loyalty
6.4 Advanced Compliance and Zero-Touch Processing
Chapter 05 Reason 4: Fraud Risk
Chapter 07 About RadiusOne

3. EBook Title | 4
About
CHAPTER 1

4. About
CHAPTER 1
Despite the many benefits of cloud based accounting software, there are some
limitations that prevent mid-sized businesses from realizing maximum efficiency.
In this paper, we discuss four primary reasons why CFOs should re-examine their
B2B payments strategy. While the customers can fix some of it with custom
tweaks, short-term resolutions will not solve the problem. The approach at
HighRadius has always been to dive into the roots of the issue. Let's figure out
'why' and 'how' successful B2B mid-sized businesses are reshaping their
payment policy.
4 Reasons Why CFOs Need to Re-think B2B Payments | 4

5. EBook Title | 4
Cost of Traditional B2B
Payment Methods and
Invoice Processing
CHAPTER 2

6. Cost of Traditional B2B Payment Methods and
Invoice Processing
CHAPTER 2
4 Reasons Why CFOs Need to Re-think B2B Payments | 6
To run a successful B2B business, C-suite executives need to work tirelessly to
ensure there are minimum revenue leaks. But in many cases, companies look at
offering multiple payment methods as a luxury rather than a necessity.
Managing B2B payments is a common pain point for many mid-sized
businesses. It also costs them much more than they are ready to admit.
Some widely used B2B payment options include:
1. Checks: Printed on paper and mailed to the merchant
2. Wire transfer: Money is transferred from one bank account to another, usually
through a third-party facilitator
3. ACH transfer: Money transferred from one bank account to another via a
clearing house
4. Credit card: Payment made using personal or company credit cards
Amidst growing volumes of ACH and other electronic payments, accounts
receivable (AR) teams at SMBs are stuck streamlining their check-heavy
receivables processes, expensive lockbox services, time-consuming remote
deposit capture solutions, and manual reconciliation methods.
Checks continue to remain the common payment format for many businesses.
Despite checks being the Achilles' heel for AR departments, suppliers have no
alternative but to accept this payment preference of their buyers. Some of the
hurdles of processing checks are as follows:
High overhead/costs: According to a survey done by the Association for
Financial Professionals, businesses spend up to $30,000 for processing 20,000
checks a month. This study states that receiving a paper check is five times as
expensive as ACH! For small and mid-sized businesses with low dollar value
transactions, the cost of processing checks directly eats into the profit margin.

7. 4 Reasons Why CFOs Need to Re-think B2B Payments | 7
Paper-based: In the B2B space, the analysts' role is to negotiate maximum
payments or payment promises from customers. However, paper-based
remittances are time-consuming and tedious to process. Analysts prefer
electronic remittances because they are easy to track and can be scanned with
OCR software to extract relevant data. Apart from its environmental implications,
paper-based remittance notes are also difficult to manage and prone to get
misplaced. Paper-based remittances also make it difficult for the analyst to sort
through past interactions with customers.
Processing checks is low-value manual work and does not help improve credit
management and collections. Being a highly manual process, it is also prone to
errors. It also requires resources to be moved from credit and supply
management teams without adding any value towards lowering DSO or working
capital.
Capital and speed: A major disadvantage of checks for suppliers is that they
come with a float of approximately three days. This buffer is also one of the
reasons why buyers favor check payment. But then, several external factors
come into play and further delay processing. The reason for slow processing
can be attributed to scanning checks and remittances separately, depositing
payments in banks, and manually keying in data for reconciliation. Together,
this delays payment reconciliation by 3-5 days. This is why suppliers are
reluctant to accept checks - payments hit the bank much later than the actual
payment date, and suppliers end up having to support longer credit terms than
intended.
As per reports by the Bank of America, there’s an estimated cost of
$4 to $20 per payment for checks
DAILY COST OF
$100
A MONTHLY COST OF
$3,000
AN ANNUAL COST OF
$36,000
ESTIMATED MONTHLY COST OF RECEIVING 2,000 CHECKS PER MONTH*

8. 4 Reasons Why CFOs Need to Re-think B2B Payments | 8
There is no support for credit cards: Since many cloud based ERPs do not have
a native payment portal, there is no scope to use credit card payments.
Increasing the acceptance of credit card payments to all transactions allow B2B
companies to:
1. Reduce risks associated with cross-border payments
2. Accelerate cash flow measures
3. Shorten long invoicing procedures
4. Receive payments immediately
Businesses that do not regularly use instant payment
platforms frequently experience cash-gaps
Source

9. EBook Title | 4
Lower Time-To-Cash
CHAPTER 3

10. Lower Time-To-Cash
CHAPTER 3
In the contemporary B2B space, time-to-cash transactions provide a
mathematical structure to businesses, which has inherent implications. A longer
or complex cash conversion cycle (time-to-cash) means that it takes more time
for the business to generate cash. These delays pose liquidity risks and may also
lead to operational challenges for small companies.
4 Reasons Why CFOs Need to Re-think B2B Payments | 10
Frequently some mid-sized companies experience slow time-to-cash
conversion. Let’s take a look at the reasons behind this problem.
Overview of transactions
In most cases, there is no easy way to make and receive payments and track
where funds are in the overall process. This state of ambiguity leads to cash
taking longer to get applied in the ledger. There’s a time lag between when a
paper-check is submitted and reflected in the AR system. Such delays increase
the company's days sales outstanding (DSO).
Digital payments are faster! Customers prefer to use credit cards for
additional liquidity.
Trends in non-cash payments, by number, 2000-20
In the US it's estimated that $3 trillion is tied up in business'
outstanding accounts receivable (AR)
Source

11. Manual Reconciliation
Manual reconciliation is a challenge for finance managers and analysts. Without
accurate cash application, reconciliation adds a hefty amount as the FTE costs
increase. Since there is misutilization of resources, over time, the time-to-cash
cycle is affected.
Businesses are now adopting optical character recognition(OCR) and email
parsing technology to automatically scan through remittance or check
information. There’s minimal manual intervention and helps resolve disputes
and deduction claims faster. This has increased FTE’s productivity while
trimming costs significantly.
Assess yourself? In your organization, how many FTEs apply cash full time?
Let’s have a better understanding of DSO and its application.
Days Sales Outstanding (DSO) - The average number of days it takes for
accounts receivables to be collected. We can calculate DSO by taking a
company's AR, dividing by net credit transactions, and multiplying by 365.
4 Reasons Why CFOs Need to Re-think B2B Payments | 11
A healthy time-to-cash cycle is a short one. A short transaction cycle indicates
healthy working capital and the business’s ability to repay debt. Some online
vendors have a negative time-to-cash cycle since they get paid instantly when
customers buy products and do not have to pay for the inventory until
customers have already paid them.
Why is this metric important?
Investors, bankers, and other financing sources often evaluate a company's
time-to-cash cycle and DSO to determine its financial health, especially
its liquidity. The more 'liquid' a business is, the more easily it can pay back
a business loan, adhere to other financial liabilities, and reinvest in growth
Suppliers factor in the company's DSO when deciding whether to extend
credit
A low time-to-cash or DSO indicates that the company is financially
healthy and converts inventory into cash efficiently

12. EBook Title | 4
Better Customer
Experience
CHAPTER 4

13. Better Customer Experience
CHAPTER 4
In the consumer business, digital payments have replaced check payments and
paper-intensive methods that are still prevalent in the B2B realm. By providing
increased options such as ACH, credit cards, debit cards, and digital wallets,
businesses can make it simpler for their customers to pay on time.
COVID-19 has underscored the importance of digital payments. Embracing
digital payments and optimizing the back office is now the clarion call for many
businesses. In a survey done by Visa, nearly 72% of the small and
micro-businesses surveyed reported that they expect their customers to
continue to prefer digital payments in the future.
Let’s look at why and how payments can be made more user-friendly and
accessible:
4 Reasons Why CFOs Need to Re-think B2B Payments | 13
Need for flexibility in payment options
Self-service portal: Use first principles to create a buyer-centric purchase
experience
No hidden costs. On average, it costs customers $3 less for every invoice
paid electronically vs. checks, which also exhausts customer’s time and
energy
Customer Experience Influences Customer Attrition
Customer attrition refers to customers severing relations with a business. These
customers do not associate with or purchase from a company after a given
period. Customer retention, on the other hand, is a valuable metric that helps
track how many customers are loyal and make repeat purchases.
Studies on customer attrition show that positive relationships with customers
lead to customer commitment and retention, while poor customer practices
result in higher customer attrition rates and eventually lower working capital.
of consumers start doing business with competitors
after having a poor customer experience
Source

14. 4 Reasons Why CFOs Need to Re-think B2B Payments | 14
89% of consumers start doing business with competitors after having a bad
customer experience
In the United States, a predicted $83 billion is lost each year due to poor
customer experiences and customer attrition
Suppose companies do not meet customers' expectations. In that case,
customer attrition rates increase because 95% of people share bad
experiences, 54% share bad experiences with more than five people, and 58%
are more likely to tell others about their customer service experiences than
they were eight years ago
80% of churned customers identify themselves as being "satisfied" or
"very satisfied" just before leaving
Overall, customer satisfaction is a crucial factor in determining the customer
attrition rate. Learning the cause of customer attrition helps businesses make
necessary changes to improve customer experiences and decrease the
attrition rate.
additional growth is seen in organizations that leverage
customer insights and more than 25% in gross margin
Source: McKinsey Insights
By growing the customer retention rate by just 5%,
Businesses can witness a growth of profit in the range of 25% to 95%

15. EBook Title | 4
Fraud Risk
CHAPTER 5

16. Fraud Risk
CHAPTER 5
Frauds have been increasing at a rampant rate in the AR space. There has been
a 42% increase in customer fraud and cybercrimes in the financial sector in the
past 12 months.
4 Reasons Why CFOs Need to Re-think B2B Payments | 16
Let’s look at the key insights into the most prominent form of AR fraud.
Check Fraud
In 2018, check fraud measured for 47 percent of industry losses ($1.3 billion),
according to the American Bankers Association’s 2019 Deposit Account Fraud
Survey. The most common form of check fraud include:
Counterfeit checks: Checks created on non-bank paper
Forged checks: Alterations of credentials or signature
Credit Card Fraud
Credit card fraud happens in two scenarios:
Account takeover: Someone steals the credentials of a credit card user through
account phishing
Counterfeit cards: Fake credit cards are used to start transactions. These
transactions are generally small, hence unnoticed
Email Phishing
Using deceptive techniques to log into another person’s account to place
orders or send emails using their credentials.
Total attempted check fraud increased to $15.1 billion
and accounted for 60% of attempted fraud against
deposit accounts
Source

17. 4 Reasons Why CFOs Need to Re-think B2B Payments | 17
Internal Frauds
Internal frauds are characterized as in-house fraudulent financial reporting
schemes. Some example includes:
Adverse Impact
Fraudulent write-offs: Crediting a customer's account to cover up a previous
fraud
Phishing customer details: Exporting a customer's details online for monetary
benefits
Increased attrition rates for both customers and employees
Squandering of the workforce’s time and efforts on low-value tasks
Internal conflicts that lead to higher churn rates
The company’s reputation and its working capital take a negative impact
All of the above leads to poor customer experience
Kiting and 3rd Party Skimming
Kiting is categorized as an external fraud, leading to the misappropriation of
payments. Generally, a fraudster would withdraw money from the bank against
a bounced check utilizing the float time.
3rd party skimming involves taking cash off the top of a business and reporting
a lower total in records.

18. EBook Title | 4
Why add Digital payments?
CHAPTER 6

19. Why add Digital Payments?
CHAPTER 6
Advanced out-of-the-box solutions like RadiusOne help enhance B2B payment
capabilities. With the addition of an augmented digital payments solution,
businesses have experienced notable improvements. Let's have a look at some.
4 Reasons Why CFOs Need to Re-think B2B Payments | 19
Reduced Payment Processing Time
Digital payments are faster to process. According to Deloitte's PayTech
Revolution report, digital payments are more than 50% faster to process than
traditional payment processing. CXO's can expect quicker payment processing,
which would instantly translate to more authority over the company's
receivables.
All the stakeholders can inspect the receipts in one place, making the approval
process easy to manage.
Diminished Administration Expenses
Digital payments significantly reduce reconciliation fees and effort. With little to
no manual intervention needed, automated AR management processes
become error-free and offer 3x higher cost efficiency than traditional payment
processing. With that, the total cost-efficiency gains could go as high as 500%.
All this cost reduction naturally reflects in improved EBITDA. Faster settlement of
digital payments also improves cash flow. Optimized cash flow improves DSO.
Improved Customer Loyalty
With best-in-class payment processes, there is no hidden cost, i.e., zero-fee
direct bank payments. There are multiple payment options with credit cards,
debit cards, and ACH. Through 'Convenience Fee', companies can offset
transaction costs and generate a new revenue stream. With payment links and
'Pay Now' buttons added to invoices and billing reminders, companies can
collect faster, RadiusOne gives customers self-service options to select and pay
invoices whenever and wherever possible. Businesses can also use best-in-class
virtual terminals to process payments on behalf of their customer's approval.
With a 12.8% projected CAGR from 2019 to 2023, the total value of digital
transactions is expected to reach $6.7 trillion by 2023
Source: Statista

20. 4 Reasons Why CFOs Need to Re-think B2B Payments | 20
of customers are willing to pay more for a better customer
experience
Source
Advanced Compliance and Zero-Touch Processing
With best-in-class payment technology, companies unlock better compliance
control with PCI DSS certification for digital payment processing. It also enables
two-factor authentication, role-level access, and fund-on-file tokenization. With
a fund on file token, companies can securely authorize, charge, and reprocess a
customers' payment method without obtaining their private data directly.
With 'zero-touch processing', companies can deliver invoices to customers with
payment links. With the advanced OCR engine, remittance information is
collected and matched to organizational codes directly, with minimal manual
intervention. Faster cash flow ensures automated and rapid cash application.

21. EBook Title | 4
About RadiusOne
CHAPTER 8

22. About RadiusOne
CHAPTER 8
RadiusOne AR apps suit AR teams' needs and aim to automate labor-intensive
processes, maximize working capital, and facilitate faster cash conversion.
The HighRadius RadiusOne AR Suite includes automation solutions for processes
including e-Invoicing & collections, cash reconciliation, and credit risk
management.
HighRadius is a leading fintech company focused on optimizing order-to-cash
processes and treasury operations by leveraging automation across credit,
electronic billing and payment processing, cash application, deductions, and
collections, powered by AI and integrated receivables platform for major
companies globally. With lightning-fast remote deployment, minimal IT
dependency, prepackaged modules with industry best practices, HighRadius is
the ultimate choice for your company's order-to-cash processes.
4 Reasons Why CFOs Need to Re-think B2B Payments | 22

23. 4 Reasons Why CFOs Need to Re-think B2B Payments | 23
Across Mid Market &
Enterprise companies
600+
customers
Transactions
Processed Annually
$2.23
Trillion
Truly Global Saas
with Users Around
the World
92+
countries
Finance Transformation
Projects
1600+

24. Corporate Headquarters
Houston
(281) 968-4473
AMERICA
APAC
Amsterdam
+31 (20) 8885054
London
+44 (0) 203 997 9400
Frankfurt
+49 (0) 69 589967310
EUROPE
India
040 4569 4500
HighRadius | All Rights Reserved
info@highradius.com
Get in touch
Learn More
RadiusOne AR Suite
Built for Mid Sized Businesses