66% of businesses collect supplier credit information
In the B2B ecosystem, companies must go through complex onboarding processes to set up customers for new transactions and vet new suppliers or vendors. While this often continues through the invoice approval and payment process, there is no standard operating procedure for this.
Onboarding can consist of many different types of analysis, and most seek to assess the financial reliability of new suppliers or partners. As part of this process, 66% of businesses collect credit information from new suppliers and 45% collect data on suppliers’ past financial performance, according to the “Innovating B2B Retail Payments Playbook,” a PYMNTS and MSTS collaboration.
Read more: Innovative playbook for B2B retail payments
Collecting these details helps suppliers ensure that new suppliers can pay on time and in accordance with contractual terms.
Nipping fraud in the bud
This is especially important in a time when payment fraud takes many forms and comes from many different places.
See more : Enterprise payment protection requires collaboration on multiple fronts
Fighting fraud is an overall process that tends to be more complex and labor-intensive in the B2B ecosystem than in the business-to-consumer (B2C) ecosystem.
In the B2B market, where payments are larger and there is no single point of sale (POS), the fight against fraud is much different. With bigger payments comes bigger stakes, causing companies to nip fraud in the bud before beginning the long and tedious internal review processes required to approve most companies’ invoices.
Digital onboarding tools also help companies assess the creditworthiness of new partners and determine appropriate credit limits to offer, by providing a digital footprint from which data is collected.
Many merchants’ onboarding processes also require selecting new partners to determine their legal status. This often involves ensuring they are certified or licensed – or checking to see if they are on international sanctions lists. Most likely, business customers will want to screen new vendors, which means that the latter will have to comply with the former’s single-vendor authentication processes.
Evaluate companies quickly and easily
Many companies also rely on manual onboarding processes, and transmitting physical documents between different stakeholders within an organization is more difficult and labor intensive than sending and receiving them via email. email or through a web portal. This can lead to significant constraints for B2B companies when collecting and submitting documents to comply with new trading partner authentication protocols.
Companies can use Accounts Receivable (AR) innovations to quickly and easily assess whether the companies they are onboarding are trustworthy. Artificial intelligence (AI) and machine learning (ML) technologies can automate the authentication process, reducing the need for manual review and verifying new vendors with greater accuracy.
Beyond the onboarding process, digital anti-fraud innovations — especially those that leverage AI and ML-based behavioral monitoring and analytics to automate the AR process — can go a long way toward Speed up and streamline the fraud screening portion of B2B transactions. These and similar technologies can detect potential fraud in real time and use automation to make Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance faster and easier for both parts.