By Peter Lucas Digital Commerce 360
With a significant portion of employees continuing to work from home due to the COVID-19 pandemic, many companies have accelerated the digitization of their business processes, especially when it comes to invoicing and accepting payment.
For many businesses, that means cutting ties with paper invoices and checks in favor of electronic invoicing systems featuring digital payment options, such as credit cards and ACH bank transfers through the Automated Clearing House Network. A study by Mastercard Inc. after the pandemic hit revealed that 50% of small businesses in North America added a digital service for collecting funds, while one in four transitioned to electronic invoicing.
One company building on this trend toward digital invoicing and payment is BlueSnap Inc., a provider of online payment solutions for ecommerce, business-to-business, and software-as-a-service companies. Since the Covid-19 pandemic hit the United States in March, BlueSnap says it has seen an eightfold increase in digital invoicing with an embedded payment link or Pay Now button. BlueSnap’s digital invoicing service supports the acceptance of major card brands, ACH payment, and local payment options globally, such as Ali Pay.
BlueSnap estimates that the global B2B payment processing market represents $127 trillion in volume, $26 trillion of which is processed in the United States.
“We had been offering digital invoicing with embedded payment prior to the pandemic, but it was moderately used,” says Ralph Dangelmaier, CEO of BlueSnap. “Six weeks into the pandemic, interest rocketed as companies realized they still had to get out invoices despite the lockdowns.”
In addition to providing its digital invoicing service to a variety of B2B suppliers, including manufacturers, restaurant and parts suppliers, BlueSnap earlier this year signed Henley Enterprises Inc., a Newton, Mass.-based coast-to-coast Valvoline Instant Oil Change franchisee. Henley uses BlueSnap’s digital invoicing system to send invoices with embedded payment links to its fleet customers. The company, which opened its first Valvoline quick lube station in 1989, has more than 200 locations.
Businesses ‘don’t want to go back’ to paper checks
Dangelmaier says BlueSnap is seeing more demand from businesses for its digital invoicing service with embedded payment to expedite payment while eliminating the need to handle paper checks and mail. “Many employees still don’t want to handle mail due to COVID, and having the ability to receive payment electronically speeds payment and improves cash flow,” he says. “Customers are telling us that once they get trained on the system, they don’t want to go back.”
The move away from checks for B2B payments has been underway for more than a decade. In 2019, a report by the Association for Financial Professionalssaid 42% of B2B payments were made by paper checks in the U.S., down from 81% in 2004.
“Digital invoices eliminate a lot of manual processes and the efficiencies gained from the technology are so strong that we see it sticking post-COVID,” says Dangelmaier.
BlueSnap began offering digital invoicing several years ago when it integrated the service into its platform through Armatic, a provider of accounts receivable and invoicing automation. In 2019, BlueSnap acquired Armatic to provide B2B companies an efficient quote-to-payment solution aimed at increasing sales and reducing costs.
In addition to digital invoicing, the Armatic platform enables B2B suppliers to issue one-time or recurring invoices and manage subscription plans. Suppliers can also integrate it with popular accounting ERP and CRM software, including NetSuite, Sage Intaact, QuickBooks and Salesforce. A self-service portal allows companies receiving invoices to review past and current invoices and provide detail about why an invoice has not yet been paid, such as a discrepancy in the shipment.
“Having that kind of detail and insights into accounts payable can save a lot of back and forth when it comes to client/customer communications in regard to invoicing,” Dangelmaier says.
In addition to B2B suppliers adopting digital invoicing, business-to-consumer companies are also adopting the technology, including attorneys, healthcare providers, landscapers and pool services. “Digital invoicing with embedded payment isn’t just for B2B companies, it’s a technology that addresses the changes in how businesses are billing and receiving payment during the pandemic.”