Using traditional methods for B2B payments can be costly and time-consuming. But a B2B payment processing solution can help you automate the processes and save money.
Electronic payments have become increasingly popular for B2B transactions, reducing the amount of paper used and increasing efficiency. But choosing a secure platform that meets your security needs is important.
Increased Efficiency
B2B payments can be time-consuming and expensive. Payment cycles can last 30 to 90 days, and many B2B transactions involve multiple people and require extensive manual processes.
Automating these payment-related processes with a B2B payment processing solution saves organizations significant money, time, and resources. For example, a company that uses paper checks to pay its invoices can incur up to $16 in expenses per invoice (before the cost of AP automation).
However, with a B2B payment solution, these costs are reduced to as little as $3, and a company can even obtain cash-back rebates from virtual cards.
Another major B2B payment automation benefit is increased accounts payable department efficiency. Reducing manual, repetitive tasks like check and ACH payments give employees the time to focus on more important projects that help their business grow.
In addition, B2B payment technology solutions can dramatically reduce transaction friction, costs, and risk by integrating high-speed credit approval into the checkout process. These integrations automatically verify how much credit a buyer can access and the payment terms. They can also identify which buyers are at a higher risk for chargebacks and offer them more personalized remarketing campaigns.
Reduced Risk
Using a B2B payment processing solution helps businesses to reduce their risk. This is due to the variety of payment methods and geographies that a B2B company often deals with.
These methods include credit cards, wire transfers, and ACH (Automated Clearing House). Electronic B2B payments move from one entity to another in an automated fashion.
In contrast, paper checks require a manual process that’s time-consuming and expensive. Additionally, they can be difficult to track and are susceptible to fraud.
This makes it less than ideal for high-value transactions and other B2B recurring payments.
Furthermore, paper checks are easily lost or misplaced, a serious security risk for any business.
The most effective way to reduce your risk is to use a B2B payment processing solution. This will help you streamline the payment process and prevent errors that could result in lost revenue or customer dissatisfaction. Ultimately, using a B2B payment processing solution will help you to grow your business without any hassles.
Increased Customer Satisfaction
Customers must have a clear and easy-to-understand transaction record when they pay for goods or services. A B2B payment solution ensures this process is simple, accurate, and secure.
The biggest challenge with handling payments is that there are multiple factors to consider, from different payment methods, geographies, and business habits. For example, international businesses need to be able to accept payments in local currency.
Moreover, they may also need to manage subscriptions and sales tax compliance across different countries. This can lead to problems with payment routing, dunning, and SaaS logic.
As a result, companies that handle large payments have to look for a more specialized payment processor. This is especially true when handling high-value transactions and addressing international demands.
Increased Reliability
Many B2B payment methods are available, each with pros and cons. Some methods are better than others for different businesses, depending on the type of business and its location.
Credit cards are the most popular form of payment for B2B transactions, but they can be expensive and complicated. Additionally, if you accept payments from a global customer, your business could incur high currency conversion fees.
Cash payments are another common option for B2B transactions, but these can be expensive and difficult to track. In addition, they are often unsafe and prone to fraud.
A good B2B payment processing solution will benefit your business, including increased efficiency, reduced risk, and improved security. In addition, it will help your accounts receivable team manage invoices, underwrite and onboard clients and track down late payments.
Increased Revenue
While cash and paper checks are still a major component of the B2B payment process, digital payments offer far greater benefits. In addition to reducing the cost of processing transactions, electronic payments improve supplier relationships and security.
Aside from removing the cost of postage and paper, electronic payments can also help companies save money on employee labor. This is particularly true if they use automated invoice processing software.
Time is valuable to any business, so automating accounts payable can help reduce employees’ time managing invoices and ACH payments. This frees up that precious resource for more strategic initiatives.
In addition to saving your team money, a good B2B payment processing solution can help your business generate more revenue from each transaction. For example, a business that processes $1,000 in monthly invoices could save $62 if they use an automated B2B payments system to process those payments. This could be redistributed to other value-added activities that further help your business grow.
