Business-to-business (B2B) payments are on the rise. Many of these transactions are done electronically rather than via cash or a check.
Various B2B payment solutions offer options like checks, credit cards, ACH, and wire transfers. They also come with fees that can add up, especially for high volumes of invoices.
Flexibility
B2B payments can be single transactions, such as buying office supplies from a vendor, or recurring, such as leasing space from an office landlord. Because of this, B2B payment solutions must be able to accommodate many different types of transactions.
These transactions can be made using a credit card, ACH payments, eChecks, or even wire transfers. A payment solution should be able to handle all of these options while streamlining the workflows for accounts payable teams. This way, team members don’t have to spend time navigating multiple systems or trying to reconcile different versions of invoices and payments.
It’s also important that a B2B payments solution offers visibility into the entire account receivable process. This way, managers can easily track invoices, payments, discounts captured, and rebates earned to maximize cash flow and drive profitability.
It is also helpful that the system can offer analytics that automate the reporting of accounts payable KPIs. This can save teams valuable time to focus on growing the business and pursuing new opportunities. Lastly, it’s crucial that the solution be easy to use and supports quality customer support.
Real-Time Payments
B2B payments involve larger volumes and higher order values than typical consumer purchases, and most of these transactions also involve some form of payment deferral. Embedded financing, which allows customers to pay for items over time, is an increasingly popular B2B payment feature. However, managing these credit payment terms within your company requires more effort than traditional cash-only exchanges and typically requires specialized software.
B2B payment solutions offer an array of automation tools for enabling real-time payments. They can help you eliminate manual processing, streamline accounts payable (AP) and receivable (AR), and make your payments more efficient. They also provide visibility into payment status and integrations with your ERP system.
Your payment solution must stay ahead of current trends as the world evolves. The future of business-to-business payments includes a shift towards digital and instant payments. This includes declining paper checks and the rise of digital payment options such as ACH, eChecks, wire transfers, virtual cards, and more. These innovative digital options are fast, safe, and secure, and they help businesses maximize cash flow.
Convenience
A B2B transaction is often much larger in volume and monetary value than a consumer purchase. That means providing customers with multiple options for convenient online payments is important. A good solution offers various digital payment methods, including credit and debit cards, virtual cards, ACH, and even wire transfers for international buyers.
These digital alternatives eliminate the hassles associated with paper checks, which can be lost, misplaced, or tampered with in transit. They also allow you to track invoices, payment statuses, and earned rebates easily.
Moreover, digital payment solutions are generally more secure than traditional methods. That is because they use advanced encryption and tokenization to protect sensitive payment information, which helps businesses comply with various compliance regulations such as anti-money laundering and Know Your Customer.
This also prevents cybercrime, which has become a major concern for many businesses even pre-pandemic. A good B2B solution will also offer a robust audit trail that displays all payment activities with date stamps, which can be viewed in the payments feed or on the payment details page.
Security
Business-to-business payments are larger and more complex than consumer (B2C) transactions, so they require more advanced security measures. A secure B2B payment solution should include encryption, multi-factor authentication, and risk management tools to keep sensitive data safe and transactions secure.
Unlike cash or paper checks, which are slow to process and prone to error, B2B credit card payments are fast and convenient. Adding automation to the transaction process makes it easier for businesses to track invoices and payments while optimizing cash flow.
When choosing a B2B payment solution, it is important to ensure it aligns with the company’s goals and workflows. For example, if a business frequently deals with international suppliers, an automated solution that facilitates cross-border payments is essential to avoid costly intermediaries and currency risks.
Scalability
The best B2B payment solutions facilitate streamlined transactions that increase the efficiency of business-to-business relationships. These digital payment systems help businesses process invoices faster and automate the reporting of accounts payable KPIs. They also offer a variety of payment methods, including cards, ACH, and eChecks. They can also handle payments across multiple currencies and languages.
Scalability refers to the ability of a system to adjust to increased workload and user demand without sacrificing performance. This is accomplished by adding or removing resources to the system as needed. Businesses need to consider scalability when choosing a software system.
There are two types of scalability for software systems: horizontal and vertical. Horizontal scalability adds hardware to a system, such as a new server, to handle more work. Vertical scalability, on the other hand, updates existing software to enhance its functionality.
For example, a company may upgrade its database analytics software to create visualizations that display large amounts of data better. The ability to scale up and down without compromising quality or performance is critical for rapidly growing businesses.
