In today’s cutthroat retail business environment, shaving off any amount of time to get paid can help retailers—and their distributors—gain that all-important edge over their competitors.
The retail industry does have a lot going for it. The sector’s average days sales outstanding (DSO) for business-to-business (B2B) payments ranges from three to seven days—the envy of practically every other sector. However, margins within the retail industry continue to be razor thin for both retailers and retail distributors, as competition remains fierce. Now, more companies are looking to real-time B2B payments to get a leg up.
Get a competitive edge in retail
According to a PYMNTS Intelligence research report produced in collaboration with Billtrust, 81% of large retail chains said that real-time B2B payments are critical to their operations. It’s a no brainer: Instant payments can accelerate cash flow, improve relations with suppliers and reduce administrative burdens on AR teams.
Thing is, it’s predominately those chains that account for the bulk of real-time payments within the retail industry. According to the report, just 17% of retailers across the entire sector agree with those large chains. Moreover, only 18% of all retailers said they were in the process of enhancing their payment systems—and most of them were those large chains.
So, what’s up with smaller retailers and retail distributors? It’s one thing to have a relatively low DSO compared with other sectors, but in the retail market, where a low DSO is standard, real-time B2B payments can be make-or-break for remaining competitive.
It can be a game changer, especially when you implement holistic AI-powered solutions across all your AR functions—solutions that can give you actionable insights to improve payment performance further.Read our latest whitepaper: Cash flow in a flash: Why you can’t afford to skip out on instant and real-time payments
Benefit from seamless integration
Why is that? Well, optimizing cash flow is a critical priority. Implementing advanced point-of-sale systems that seamlessly integrate with ERPs, inventory and financial systems can enhance B2B transaction efficiency and provide real-time insights.
What’s more, if you use a unified AR platform that seamlessly integrates credit, eCommerce, invoicing, payments, cash application, and collections, you can get a bird’s-eye view of performance across all of these activities with AI and analytics.
“Things really get interesting when data, analytics and AI can be used to compound value across products and the entire AR process,” says Ahsan Shah, Billtrust’s Senior Vice President, Data Intelligence.
“All the data you have already collected about customers and their payments can be used to assist you with your workflow, make recommendations and suggestions, and even help you compile personalized payment reminders to these customers,” Shah says. “That’s exactly what we are doing right now. We offer an AI-powered, complete view of customers’ activity across your entire AR process, enabling you to make intelligent AR decisions.” Billtrust offers a unified AR solution that streamlines financial operations while leveraging traditional AI, machine learning and even generative AI to help you elevate your entire organization's performance.Don’t cling to outdated manual accounts receivable processes that stifle your growth and frustrate your buyers.
FAQ
Real-time payments are crucial for the retail industry because they accelerate cash flow, improve supplier relationships, and reduce administrative burdens on accounts receivable (AR) teams. This can give retailers a competitive edge in a fast-paced market.
Large retail chains benefit from real-time B2B payments by enhancing operational efficiency, reducing days sales outstanding (DSO), and providing immediate access to funds. This helps them maintain a strong financial position and better manage their supply chains.
Smaller retailers may struggle with the initial implementation and integration of real-time payment systems. However, adopting these systems can be a game changer, helping them stay competitive by improving cash flow and operational efficiency.