For many mid-size companies, the B2B payments process remains plagued by an outmoded mix of paper checks, manual reconciliation, and siloed workflows, all of which erode efficiency and eat into margins.
But finance leaders across industries are increasingly recognizing the potential to optimize their payments operations. By leveraging automation, organizations can transform B2B payments from a back-office function into a driver of valuable savings, efficiency, and competitive advantage.
What Manual Payments Are Really Costing Your Business
Many companies that are still handling B2B payments the old-fashioned way simply aren’t aware of how much this approach hurts their business. For these businesses, since payments aren’t visibly broken, there’s no need to fix them.
But this is a costly misapprehension, according to Brett Dittrich, account executive at Paystand.
“Companies with outdated payment operations suffer from drawbacks including lack of transaction visibility, slow funds verification, and over-reliance on back-end manual processes,” Dittrich said.
Mid-sized businesses often overlook these issues because the true cost of legacy payments doesn’t appear as a single budget line item, Dittrich adds. Instead, it’s spread across multiple areas, such as headcount, processing fees, and delayed cash. This diffusion across an organization makes the total cost difficult to get a view of and easy to underestimate.
But in reality, these costs are significant. For mid-sized companies that rely largely on manual processes, each invoice can cost up to $24 to process, according to industry research. That means businesses with high invoice volumes may pay more than $1 million annually in processing overhead.
Labor comprises the lion’s share of this total cost—around 60 to 75%, according to industry data. Finance teams often spend significant time performing rote tasks like invoice matching, data entry, and collections follow-up. What’s more, manual work multiplies fast when a company’s business grows. Dittrich describes a pattern he sees often, where a company doubles in revenue and headcount grows across the business, but the finance team stays the same size.
“You end up with sales teams intervening in accounts receivable because the AR team can’t keep up,” he said. “It’s the part of the business that always gets left behind—and it has ripple effects everywhere.”
Lack of cash flow visibility is another significant cost of manual payments processes. When payment arrives by check or ACH, there’s no signal it’s coming until the funds actually land. That blind spot makes accurate forecasting nearly impossible, forces conservative decisions around hiring and spending and pushes companies to draw on credit lines to cover short-term gaps due to uncertainty about incoming funds.
Accurate visibility around cash flow is especially important for businesses with smaller financial reserves, making this a particularly damaging drawback of manual payments for this segment.
What Automation Changes
The hidden costs of manual payments can create a significant drain, but the good news is that these challenges can be effectively solved by payments automation.
Payment automation doesn’t mean replacing a finance team. Rather, it means letting automated systems and tools take care of repetitive, lower-value tasks so that team members can devote their time and energy to higher-value, strategic work.
Automation can handle matching invoices to incoming payments, syncing with ERP systems in real time and triggering collection reminders, leaving human finance professionals freed up to work toward higher-value goals around vendor negotiations, long-term financial planning, strategic growth initiatives and other critical objectives.
Automation also offers significantly improved cash flow visibility. That’s because payment data flows directly into ERP systems as transactions clear, giving finance leaders a real-time picture of liquidity.
The financial benefits compound from there. For instance, automation can steer transactions toward bank-to-bank rails instead of credit cards, eliminating processing fees that compound fast at volume — a meaningful P&L improvement for high-volume businesses.
For growing companies, automation offers another benefit.
“The ability to scale without adding headcount is one of the biggest wins of automation,” Dittrich said. “You’re able to grow your business without your finance team becoming a bottleneck, and that’s a significant competitive advantage.”
As transaction volume increases, automated systems absorb the load — meaning finance teams can support a much larger business without adding staff or sacrificing accuracy.
How to Make the Case Internally
For finance leaders who need to secure internal buy-in, Dittrich’s advice is to start with total cost of ownership around manual payments.
“A lot of times it’s death by a thousand cuts,” Dittrich said of manual payment costs. “You don’t have real-time visibility, so you can’t make the right business decisions. Your working capital is struggling because it’s not easy for customers to pay you, or for your team to collect. It only amounts to $2 million a year in credit card transactions, but you’re paying $60,000 in fees. It all adds up.”
The case for optimizing payments becomes much clearer and stronger by surfacing those costs—labor, fees, delayed cash, and lost decision-making capacity—into a single picture. Once that full number is visible, the conversation tends to progress swiftly toward a plan of action.
“When you look at everything—the fees, the headcount, the working capital you’re leaving on the table—the total cost of doing nothing becomes very clear,” Dittrich said.
For many mid-size companies, payments are one of the ripest areas to drive efficiency—but also one of the most overlooked. Businesses that can gain clarity around the real cost of manual payments can then leverage automation to optimize their payment operations, driving valuable savings and strategic advantages that scale, continuing to support growth and success over the long term.
Ready to see what payment automation could mean for your organization? Contact Paystand to learn more.
