Narayan Ramamoorthy | FinTech Magazine

A new crop of innovators is beginning to realize the potential for greater disruption in B2B payments, which has long been overlooked in favor of B2C. One of the most neglected areas is B2B accounts payable (AP) and accounts receivable (AR).

Global PayEX’s SaaS platform helps businesses improve their AP and AR flows. The company wants to make B2B payments as seamless as paying a utility bill, and because the company is only five years old, it doesn’t have any legacy technology hangovers holding it back.

Implementing Global PayEX’s platform can reduce days sales outstanding (DSO) – the biggest metric in AR. It can also increase the time it takes to reconcile a payment, which can then shorten the overall payment cycle and allow customers to place their next order faster. “This will be a very strong revenue acceleration for our customers, and also great customer satisfaction for our customers’ end customer,” explains Chief Revenue Officer Naru Ramamoorthy. When Global PayEX’s platform is fully integrated into a new business, it is able to save them between 1% and 4% of their annual revenue.

Solves unique challenges across both AR and AP

The company’s platform can be thought of as two separate “halves”, one for AR and one for AP. When it comes to accounts receivable (AR), companies face a challenge with electronic invoice presentation, collection and reconciliation of payments due to multiple incoming formats for payment advice and bank statements. Deductions are a complex challenge – customers have different deduction codes to refer to the same events, whether it’s a return, a shortage or a withholding tax. Even customers in the same industry have different ways of referring to the same thing.

Global PayEX’s platform enables a customer portal for EIPP (electronic invoice presentation and payment), removes friction in B2B payments, and automates reconciliation to ERPs via auto-reading of incoming documents and reconciliation in accordance with corporate accounting rules and deduction classifications. It gives time back to the finance teams, who are no longer faced with the difficult task of sifting through all this complex data manually.

In accounts payable (AP), the system functions as a mirror image. Suppliers can upload their invoices to a supplier portal and the Global PayEX platform is able to automate the processing of that invoice into the customer’s ERP.

Use of data to embed financial services in Global PayEX

Because Global PayEX sits at the center of so much data, it can provide greater value for its customers. The platform can identify behavioral patterns and understand how customers pay their invoices. If a customer is late with a payment, the system automatically sends reminders and chases customers for money, while also knowing which behavior patterns are out of the ordinary.

Global PayEX seeks to incorporate embedded finance into its platform by inviting banks and lenders into its digital ecosystem. The platform already knows which of a supplier’s (sellers) or distributors (buyers) have access to financing, because it does the reconciliation for it, so Global PayEX can anonymize this data and send it to partner banks or lenders. This data allows them to make insurance decisions and provide financing to a certain number of these suppliers or distributors.

When a distributor next logs into the customer portal app, they will see that they have a new credit limit of £50,000 or £100,000 from a partner institution. If they choose to accept it, they will be onboarded by the institution in the usual way before they can pay with that credit for future invoices.

“Banks are interested because they want to offer a differentiated service to their corporate banking customers on receivables and payables,” says Naru. “Banks don’t necessarily have these sophisticated technologies, so they use ours.”

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