Payments on Your Terms

August 2020

Payments on Your Terms

Your buyers have a reason to rejoice

Adoption of both AP (accounts payable) software and third-party AP providers is increasing — and they’re making paying bills both easier and a source of revenue generation for buyers. But suppliers are getting squeezed. AP providers issue credit cards to buyers and offer rebates on payments, and then they pressure suppliers to accept them. The high interchange fees associated with cards increase the cost of acceptance for suppliers. The payments themselves take 5.5 minutes to apply on average, and AP providers frequently contact suppliers attempting to gain acceptance of their card payments. Consequently, suppliers must retain adequate staff to handle these contacts. With Gartner predicting that, by 2025, 50% of buyers will use AP providers to handle their payments and Accenture projecting that B2B (business-to-business) card spend will be $355 billion by 20221, suppliers are facing a major challenge in the coming decade. But advanced accounts receivable practices can optimize the benefits of cards (quicker invoice-to-cash time) and rebalance payments’ agency in favor of suppliers:

  • Negotiating with financial institutions at the onset of the card onboarding process can help get supplier payment preferences honored.
  • Calculating the cost of acceptance of all payment channels can help suppliers be more strategic in setting their payment preferences.
  • A customer segmentation strategy allows suppliers to better meet each buyer’s needs and nurture unique business relationships.

These smart AR (accounts receivable) practices can be best achieved by utilizing accounts receivable automation and supplier-driven payments solutions.


The emergence of electronic payments has multiplied the ways suppliers can be paid, and it has also exponentially increased the problems associated with those payments. For businesses accepting hundreds or thousands of payments from unique buyers paying at different times, through different channels and with varying levels of remittance data, fees, and processing times – advocating for their own interests can be a major challenge. And suppliers in highly competitive or commodified industries may feel that they have little choice over how they accept payment from buyers and their representatives. In this paper, we will explore the current B2B payment landscape across paper checks, credit cards, and ACH (automated clearing house) and unpack the powerful dynamics between buyers, suppliers, and AP providers. We will describe AR best practices that suppliers can employ to get their payment preferences honored while still satisfying their customer’s needs. We’ll also conduct an overview of the role accounts receivable automation and new payments technology, such as KeyTotal AR®, powered by Billtrust®, can play in leveling the playing field.

Billtrust has spent almost 20 years striving to perfect accounts receivable through software, services, and automation. Today, there are more ways to get paid than ever.

Paper check

The tried and true. Checks are relatively inexpensive for buyers and AP providers, but beyond the remittance data and payment arriving together in a single envelope, there isn’t much reason to advocate for it as a supplier. The lockbox fees charged to suppliers are not insignificant. And checks are both the most prone to fraud and the slowest form of payment. While a check is in the mail, the supplier’s working capital is depleting and the buyer’s credit line with a supplier awaits replenishment, suspending new orders. The extended time between transmission of cash and cash application reduces both the buyer’s buying power and hampers the supplier’s sales potential. And yet, 42% of B2B payments are still sent via paper checks2 – which is a testament to the challenges of the rest of the payments landscape.


Cheap, quick – what’s not to love? Answer: the lack of remittance data. Suppliers get their money faster with ACH than they do with checks, but they have to hunt for remittance data in emails or AP portals, and sometimes the data is never sent at all. Without remittance data, payment amounts that can include deductions, overpays, or are meant to satisfy multiple invoices are difficult or impossible to resolve. And the supplier is left dealing with a pile of cash on account that needs to be laboriously sorted through. Or left with no cash at all. ACH payments initiated through debits by suppliers can be clawed back by buyers, or be unfunded (subject to Non-Sufficient Funds), so payments transmitted are not always guaranteed. And suppliers must share their bank information with every buyer that wants to push ACH payments to them. While most business accounts have safeguards in place, they are not free of security risks.

Credit cards

Buyers love them. Who doesn’t like rebates and points back? But they create conflicts for suppliers. They are the fastest mode of payment: funds are guaranteed, and remittance is often included with the payment instruction. However, payments still take 5.5 minutes to process on average when sent via card (according to proprietary Billtrust data). Additionally, the rebates that buyers love are funded by high interchange fees. Payment acceptance technology allows suppliers to optimize their card acceptance and take advantage of Level 2 and Level 3 interchange rates while providing line item reporting to buyers. But not every supplier has optimized their payment acceptance processes, and many are rejecting card payments as a way to control costs. Credit card payment rejection is a major conflict in the B2B payments landscape. Buyers and suppliers are trying to optimize their side of the transaction, but each are harmed in the process. Buyers outsource the recruitment of suppliers to third parties, which can affect the delicate balance of interests between buyers and suppliers. When suppliers reject card payments, they elongate their DSO (days sales outstanding), shrink their working capital, and may be required to take on financing to fill cash cycle gaps. Additionally, buyers aren’t usually informed that their payment was rejected or why. They are generally only contacted once their account goes to collections, and they then tend to remedy the situation with a paper check.

The straight-through-processing challenge in B2B payments

STP (straight-through-processing) is any step of the O2C (order-to-cash) cycle proceeding without the need of manual handling by AR professionals. For example, a system that receives payment and remittance data from a buyer, settles funds, and automatically applies the cash to the correct invoice would be said to have achieved STP. STP increases security by removing payment data from human hands: speeds accounts through O2C: and lowers overhead costs. Achieving STP of at least some parts of the O2C cycle should be the goal of every AR organization. According to the Association for Financial Professionals 2016 survey, only 40% of featured companies had “any” level of STP, and only 8% were able to straightthrough-process more than 4/5 of receivables.1

The problem is complexity

Every AP provider is different. They all have their own specifications and requirements for an STP integration. Most suppliers don’t have the IT resources to service each individual AP provider’s requirements. Additionally, changes in suppliers’ ERPs (enterprise resource planning) would necessitate AP providers updating the integration. And smart technology solutions are necessary to prevent payments and remittance data being accepted and applied without validation.

Financial technology companies are working hard to securely, accurately, and economically automate B2B payments in order to finally put straight-through-processing in reach.

Unfortunately, there’s no such thing as a perfect payment. The chart below shows a summary of what the modern AR professional faces.

Summarizing the challenges

Cash-flow delays

As DSO and other indicators of unapplied receivables rise, working capital drops and sometimes necessitates financing for suppliers.

Costs of PCI compliance

PCI (payment card industry) compliance can sometimes require a major overhaul of AR systems and processes. The costs of these changes can discourage businesses from even opening credit cards as a payment channel.

High costs of payment processing

Manual cash application processes require expensive overhead, and Level 1 credit card processing comes with high fees.


The order-to-cash cycle spans multiple AR professionals at even very small firms. Manual processes lead to siloed working styles that foster inefficiencies because they can’t flag problems until they become major challenges.

Supplier preferences not honored

Suppliers have difficulty influencing the paying behavior of their buyers and often must accept suboptimal payments in order to maintain cash flow and keep buyers happy.


The manual processes most firms use to process card payments expose numbers to human eyes and ears – and even attempts at fraud can damage a company’s reputation. Some 77% of respondents to a Forrester survey said they were ready to invest in combating fraud challenges brought by new technology.3

Rebalancing the AP to AR power dynamic

It is difficult to be strategic when you’re struggling. And unfortunately, that’s how many suppliers today feel about their payments acceptance processes. Suppliers are inundated with requests to accept card payments regardless of the interchange fees, security challenges, and overhead requirements to receive card numbers by email and phone.

But there are proven methods to get out from under the ocean of difficulties posed by cards and to maximize the benefits of this growing payment channel.

One is to start strong. The first contact many suppliers have with a particular buyer’s card payment program is often a phone call from the buyer’s financial institution or AP provider. The third-party’s goal is to enroll suppliers into their program so they can begin accepting card payments. This is an important moment. This call is essentially a negotiation, and the supplier must be prepared.

This is the moment when a supplier can ask to have their payment preferences honored in exchange for accepting the AP provider’s card on behalf of the buyer. The supplier needs to do some work here. First of all, the supplier must have a dedicated professional to answer the phone or email contact. Secondly, the supplier must understand its own costs of payment acceptance across channels. And finally, the supplier needs a payment preferences strategy that they can apply to all of their buyers or to this buyer in particular. Now is the time for them to set the terms of payment.

Deciding on your terms

There is a harmful misconception that the accounts receivable department is more functional than strategic. It’s so widespread that many AR professionals may find themselves believing it.

But in AR, strategic challenges abound

Balancing payment channels with margins

Margins become thinner as competition grows, and no business wants the costs of payment acceptance to contribute to that challenge. So, many businesses attempt to influence their buyers to utilize a preferred payment channel or shut off some channels completely.

Some reflection is required when developing a payments acceptance strategy, as card fees are not the only cost to consider. Additional costs include lockbox value-added keying fees, overhead for in-house cash application, and the risks of lowered working capital due to poor cash flow.

The strategic AR professional must balance these costs against the benefits of meeting customer payment preferences, especially in highly competitive or commoditized industries where payment channel acceptance can be a major competitive advantage.

Aligning with the needs of the whole business

Do you remember the famous parable about the moving company called fast, cheap, or good? They had three tiers of service:

  1. Fast and cheap, but not good
  2. Good and cheap, but not fast
  3. Fast and good, but (and here was the punchline) not cheap

The modern AR professional is faced with a similar trilemma when negotiating terms with customers. They must decide what to prioritize:

Fast cash

ACH or cards meet this requirement

Cheap cost of acceptance

ACH and paper checks can apply here, but overhead costs must be considered

Good data

Cards and paper checks meet this requirement – cards’ processing costs can be lowered with good data, as good data enables Level 2 or Level 3 settlement

AR professionals must take the needs of their whole business (and their customers) into account when developing their payment acceptance strategies.

Recognizing the benefits of card for suppliers

In 2018, Billtrust analyzed 212,000 online payments across 335 B2B enterprises who paid 791,000 invoices in order to understand how fast they made online payments. To do this, they compared the payment date to the invoice date.

The analysis clearly showed that credit card payments are paid faster than ACH payments. This is attributable to the supplier’s ability to set attractive incentives for buyers, such as only being allowed to pay via card (and collect rebates) for x number of days post invoice. The average invoice paid online with a credit card took only 21 days to pay vs. 30 days for an ACH payment.

In many organizations, reducing DSO across one payment channel by nine days, and its associated cash flow and working capital benefits, may make the interchange fees worth paying, even without considering the customer experience benefits.

It’s not you, it’s me

Suppliers shutting down payment channels with certain buyers is a growing phenomenon. Sometimes, it is because of unappealing buyer behavior, like consistently poor remittance data that is slowing down cash application along one payment channel, or high card rates on high ticket/low volume payments that could more profitably be accepted by check or ACH.

Sometimes the problems are on the supplier side, like a manual cash application process forcing an end to ACH payments or an unsophisticated card settlement process that can’t process Level 2 or 3 data, leading to unnecessarily high interchange fees.

Embracing digitization across the order-to-cash process can help suppliers automate payments, reduce errors, and enhance security.

The modern AR professional needs to know when to work to influence buyer behavior and when it makes more sense to optimize internal processes with accounts receivable automation and supplierfocused payments platforms.

Introducing KeyTotal AR:

The end-to-end accounts receivable solution

Meet KeyTotal AR

KeyTotal AR, powered by Billtrust®, is an end-to-end accounts receivable solution that streamlines and automates invoice-to-cash processes, reducing costs and helping to lower days sales outstanding. You will also gain visibility into your invoice-to-cash processes, allowing you to optimize your processes based on industry best practices.

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Flexible Invoice Delivery

Invoices delivered how your clients want them, whether it’s through electronic channels including email, fax, bank, mobile, online, and A/P systems, or via print and mail through our eight distribution facilities across North America.

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Secure Multichannel Invoice Payment

Your clients can access a secure, fully hosted, cloud-based site when they can sell-serve to view and pay invoices 24/7, 365 days a year via ACH or credit card.

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Intelligent Cash Application

Eliminate manual invoice and payment matching. Cash application combines intelligent matching with supervised machine learning to give you automated matching with speed and accuracy.

KeyBank has taken a unique approach in collaboration with Billtrust, a leading innovator in accounts receivable automation. We connected with Billtrust in 2017 to build upon our core treasury platform. The goal was to improve operational efficiency for corporate clients during the invoice-to-cash process with a flexible, cloud-based solution.

More than a receivables system, KeyTotal AR enables the facilitation of 100% of invoices and streamlining of receivables processes – reducing costs and helping lower DSO. Visibility into invoice-to-cash processes enables process optimization based on industry best practices. KeyTotal AR provides a diverse mix of electronic invoicing and payment options to help improve AR efficiency. 

With its robust features, KeyTotal AR helps put best practices in motion.

Features of KeyTotal AR

  • Send invoices faster for less with automated print and mail delivery, leveraging eight North American print facilities for quick and efficient delivery.
  • Give customers the power to view, research, download, print, and pay invoices online using a secure, branded electronic invoice presentment and payment (EIPP) portal.
  • Enable customers to quickly receive and pay invoices from multiple vendors in one central location using the payment method of their choice.
  • Quickly and conveniently email your customers invoice summaries with PDF invoice attachments, and provide single-click payment options on a secure site.
  • Automatically send customers’ invoices into their AP systems.
  • Supervised machine-learning cash application engine automatically matches and applies any payment type.
  • Integration with over 100 ERP systems.


The development of electronic payments in the B2B landscape has, up until now, heavily favored the buyer side of the transaction by lowering the costs of transmitting payment and providing rebate opportunities via credit cards. Much of the conflict in this space has been borne of supplier-side rebellion to unsatisfactory remittance data and high fees.

But new technologies are offering a way to balance the playing field and benefit the buyer and supplier equally. Accounts receivable automation provides both labor and cost savings that can offset the burden of payment acceptance fees and paves the way for straight-through-processing of accounts receivable.

The field of AR automation has developed to the point that efficient solutions are now available for business of all sizes and payment processes across all payment channels. The entire order-to-cash process has the potential to be automated economically. Implementing AR automation opens the opportunity for a company to benefit from future digitization initiatives.

KeyTotal AR, powered by Billtrust, can streamline your end-to-end receivables processes – reducing costs and improving the accounts receivable process through the use of automation technology.

New technology is bringing lower fees, the quicker transmission of funds, fast settlement, and greater cooperation between buyers and suppliers. The future of B2B payments is complexity made simple.

To learn more, visit


Accenture. (2018) A Slice of $700+B in US Commercial Card Spend Up for Grabs.

Retrieved from


Association for Financial Professionals. (2019). 2019 AFP Electronic Payments Survey.

Retrieved from


Banking News South Africa. (2020) Understanding the evolving payments landscape. Retrieved from


Optional add-on available upon request.


Gartner Research. (2018) Magic Quadrant for Procure-to-Pay Suites

Billtrust is a registered trademark of Billtrust. All rights reserved. is a federally registered service mark of KeyCorp.

KeyBank Member FDIC.

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