Create the B2B payment advantage with Basware Pay, a global B2B e-payment solution offered in collaboration with MasterCard. Basware Pay allows buyers to pay at or after payment terms while making sure that suppliers are paid early with rich remittance data. The solution is ideal for organizations with a long tail of suppliers.

1. Creating the
payment advantage
September 2014

2. Creating the
payment advantage
This is a summary of data from the Creating Payment
Energy research published by MasterCard and
Basware with advice and practical measures from the
research findings.
With all the burning issues of payment and
cashflow described in the research, there is
now a need to consider the next steps for
your business. What are the implications for
your buyer-supplier relationships and finance
supply chain, and how do you create a
payment advantage with Basware Pay?
Creating the payment advantage - view the full report at www.basware.com/e-payment 2

3. How does B2B
payment evolve?
Businesses now operate in a global,
interconnected financial world where the
cause and effect of any company
payment program has implications for
the entire system.
The current approach to B2B payments
is defined by three core challenges:
Bad Habits
Risk Aversion
Process Paralysis
BAD HABITS:
As buyers and suppliers, businesses are resigned
to late payment being a ‘fact of life’ that they just
have to live with
74%
of businesses think late
payment is a fact of
business life and will
always happen
Creating the payment advantage - view the full report at www.basware.com/e-payment 3

4. Cash position compared to a year ago
Half of businesses are hoarding cash and have more cash in
the bank now than they did a year ago
Q: How does your organization’s current cash position compare to a year ago?
RISK AVERSION:
Companies tend to hold on to cash and create
strategies to slow down payment cycles
48%
of businesses surveyed
have more cash in the
bank compared to a year
ago, with only 11% in a
weaker cash position
Creating the payment advantage - view the full report at www.basware.com/e-payment 4

5. There is the potential within these trends to negatively impact
the entire payment network. Businesses stretch payment
terms as an easy option to strengthen the balance sheet,
strong cash positions create a misleading sense of confidence
and payment processes are in a perpetual cycle of playing
catch-up to commercial pressures.
What has to change?
Something and everything.
The solution to the problem sits within the processes and
services that manage payments between businesses, the
interconnections in the B2B payment ‘ecosystem’. A
combination of credit tools, discounts and payment services
can help businesses move away from the bad habits, strategy
and processes that surround payment networks.
69%
of organizations state
that their ability to take
advantage of supplier
discounts is
compromised due to
their own process
bottlenecks
PROCESS PARALYSIS:
The services and systems used for billing and paying lack
automation and fall short of helping businesses develop
new ways to approach old problems
Creating the payment advantage - view the full report at www.basware.com/e-payment 5

6. The conflict
of cashflow
Customer payment, cashflow and supplier payment
are intrinsically linked, but they need not be in conflict.
In an ideal world, delaying payment should not be
seen as a strategy. The payment system itself should
create the flexibility for buyers and suppliers to
insulate themselves from cashflow risk.
88%
of respondents feel
that suppliers should
be paid promptly,
57% have actively
delayed payments in
the past 12 months
67%
of respondents
have used payment
terms as a strategic
lever to help
manage cashflow
Improvements to cash situations
Payment terms are the key lever that
businesses use to improve their cash
position
Q: Which of the following has your organization
done, or sought advice / information on in the
last 12 months to help improve its
cash position?
Creating the payment advantage - view the full report at www.basware.com/e-payment

7. Price pressures drive
cash management
Managing payment issues is only part of the
equation for overall cash stability.
Indirect spend and the ‘long-tail’ of smaller suppliers
can benefit from a sustained or strategic focus on
discounting or payment terms negotiation. While the
environment is complex, with a variable composition of
business types, there is reward for all parties if indirect
spend is addressed strategically by buyers.
However, in the research, businesses suffer from not
being able to get invoices paid on time, and also feel
operational pain in trying to manage long-tail supplier
payments. Everybody suffers.
66%
of respondents state that
they are experiencing more
downward price pressures
than they were three
years ago.
Creating the payment advantage - view the full report at www.basware.com/e-payment 7

8. The supplier story:
The benefits of getting
paid on time
Companies point to tangible benefits that could be
derived from timely invoice payment: more
investment in the business, improved client
relationships and reduced credit lines.
48%
would invest more in their
business overall
46%
would have improved
relationships with clients
48%
would reduce credit lines
Creating the payment advantage - view the full report at www.basware.com/e-payment 8

9. 74%
have difficulties in
realizing discount
opportunities
70%
feel the pain of
spending time dealing with
suppliers chasing
payments
63%
have operational costs
around reconciliation
between invoice and
payment
The buyer story: Accounts
payable pain points
Buyers experience problems in all directions relating
to accounts payable, with wasted time, reconciliation
issues and access to discounts rating highly as
challenges.
Creating the payment advantage - view the full report at www.basware.com/e-payment 9

10. Cashflow pressures result in businesses
having to limit expenditure, putting pressure on
financial resources and resulting in bad
decisions being made to resolve financial
issues. These are long-term problems derived
from endemic and unchallenged behaviors
between buyers and suppliers.
Bad habits surrounding supplier payment,
invoice reconciliation concerns and labor
management issues are symptomatic of
process inefficiencies and automation issues.
The research shows that only 23% of businesses
describe their existing payment processes as
highly automated.
32%
have reduced critical
business expenditure
27%
of finance teams have
worked longer hours
26%
have made poor
strategic decisions
Impact of
cashflow pressures
Creating the payment advantage - view the full report at www.basware.com/e-payment 10

11. Creating the payment
advantage:
Summary
Buyers and suppliers are not in competition.
Payment networks should operate on the basis
of synergy, not conflict, and service providers
should facilitate this aim. All businesses in the
supply chain should realize an advantage from a
balanced payment ecosystem.
Giving buyers flexibility and suppliers control is
key to striking the right balance within a
payment network. This requires a combination
of credit facility, supplier credit finance and
automation software and tools that support
supplier enrolment, compliance and
invoice settlement.
Finance Advantage:
Basware Pay ensures approved invoices are settled
immediately as a credit service to buyer organizations. This
improves cashflow and streamlines complex indirect payment
processes. Keeping cash in the business longer improves cash
control and overall cash position with no incurred cost to buyers.
Process Advantage:
Improved cashflow delivered via payment automation
incentivizes greater levels of automation, easing the challenge
of payment inertia and encouraging growth. Creating payment
efficiency reduces time spent in payment processing, allowing
AP to focus resources more effectively.
Basware Pay significantly reduces payments-related stress
between AP and your long-tail of suppliers. Fewer supplier
inquiries mean more time for value-adding tasks. Supplier
onboarding helps with time-intensive elements of invoice
processing and settlement activities.
Network Advantage:
Creating a purchase-to-settle ecosystem by integrating the
global payment networks of Basware and MasterCard unlocks
the value from B2B commerce. Suppliers control DSO pressures
and improve cashflow with rapid invoice settlement through the
network. As part of the Basware Commerce Network, buyers
and suppliers leverage services which AP and AR teams use for
payment automation, reconciliation and settlement visibility.
Creating the payment advantage - view the full report at www.basware.com/e-payment 11

12. Allowing buyers to settle invoices with a
credit facility keeps cash in the bank for
longer without delaying supplier payment.
Suppliers can realize invoice payments
immediately with a minimal concession on
the invoice value (2%). And all this benefit is
realized without negotiation or disruption to
day-to-day business.
Creating the payment
advantage:
Summary
With Basware and MasterCard in partnership to
deliver Basware Pay, many of the challenges
draining payment energy from the network
are overcome.
Creating the payment advantage - view the full report at www.basware.com/e-payment 12

13. Basware is the global leader in providing purchase-to-pay and e-invoicing solutions in the
world of commerce. We empower companies to unlock value across their financial operations
by simplifying and streamlining key financial processes. Our Basware Commerce Network, the
largest open business network in the world, connects 1 million companies across 100
countries and enables easy collaboration between buyers and suppliers of all sizes. Through
this network, leading companies around the world achieve new levels of spend control,
efficiency and closer relations with their suppliers. With Basware, businesses can introduce
completely new ways of buying and selling to achieve significant cost savings and boost
their cashflow.
Find out how Basware helps money move more easily and lets commerce flow at
www.basware.com.
www.twitter.com/basware
www.facebook.com/BaswareCorporation
www.linkedin.com/company/basware
MasterCard is a technology company in the global payments industry. We operate the world’s
fastest payments processing network, connecting consumers, financial institutions, merchants,
governments and businesses in more than 210 countries and territories.
MasterCard’s products and solutions make everyday commerce activities – such as shopping,
traveling, running a business and managing finances – easier, more secure and more efficient
for everyone.
The MasterCard Enterprise Partnerships team has been formed to bring MasterCard’s existing
assets, technology, network, reach, products and solutions to bear in areas that are outside
MasterCard’s traditional domain. We are partnering with global market leaders who have significant
depth of experience in their industries, combining their knowledge and infrastructure with our assets
in order to drive real enterprise value.
www.twitter.com/MasterCardNews
www.mastercard.com
Research Methodology
1,015 senior strategic decision makers within finance with a view
of both Accounts Receivable and Accounts Payable processes
completed the survey during June / July 2014. Respondents are
equally split between SMEs (50-499 employees) and enterprises
(500 or more employees). Regions surveyed include Australia,
Belgium, Denmark, Finland, Germany, Netherlands, Norway,
Sweden, UK and US. Research conducted by Loudhouse, an
independent research agency based in London.
Creating the payment advantage - view the full report at www.basware.com/e-payment 13

14. Download the
full report
www.basware.com/e-payment