Digitalizing B2B transactions has been discussed for decades, but businesses are still hesitant to replace manual accounts payable and receivable processes. There are several reasons for this reluctance. Let’s look at five facts about B2B payment solutions.
Labor and cost-efficient
When compared to traditional methods, B2B payment solutions can save companies a considerable amount of money. Businesses are no longer required to write, deposit, or reconcile checks. Processing one check can cost up to $2, and the time can add up quickly if a large volume of transactions is involved. Additionally, these digital payment solutions make the entire process faster and easier. This means that employees can focus on their core products and services rather than juggling the multiple steps involved in manual check processing.
Modern B2B payment solutions help companies eliminate paper, improve payment visibility, and integrate with their existing business tools. These payment solutions can also increase their cash flow. Businesses can react quickly to changes and take advantage of new opportunities with more cash on hand. And because these solutions are more efficient, they’re better for the environment. They also increase productivity and profitability.
As the financial services industry evolves, electronic B2B payments also thrive for a better system. Before, solution providers had too much confidence in buyers’ purchasing power and failed to consider suppliers’ needs. These days, B2B payment solutions save businesses time and money by eliminating the need to write, deposit, and reconcile checks. Besides, processing one check costs $2, which can add up to a large volume. Instead of spending their valuable time dealing with these tasks, employees can focus on providing their core products and services.
In addition, B2B buyers expect a B2C experience. They want to be able to use purchase orders and negotiate payment terms. However, paper checks are still the preferred payment method. Therefore, many B2B payment solutions use virtual credit cards. These virtual credit cards assign a specific amount suitable for a single transaction. Besides being convenient, virtual credit cards also reduce the risk of B2B credit card fraud.
Integration with existing systems
When it comes to B2B payment solutions, many options are available. ACH is a popular option, as it is widely recognized and can be used almost anywhere. However, it has certain drawbacks. While it works well for the accounting sphere, it isn’t easy to integrate with existing systems. Additionally, it is challenging to track B2Btransactions if a user is high-risk.
In general, a B2B payment processor improves the speed of invoice processing, client payments, and financial accounting. Ideally, the solution provides complete cost visibility, integrating with existing systems and accounting tools. This helps the business understand its spending data in detail and enables easy auditing. Another benefit of B2B payment processing is that there is no need for paper records – no more receipts to store, no more receipts to track, and no more manual paperwork to deal with. In addition, no more paper means less waste, which is also good for the environment.
Flexibility in the transaction process
Many B2B buyers are reluctant to make upfront payments for products or services and would rather pay a deposit instead. Flexible payment systems give customers the freedom to choose the payment method they prefer and can help businesses grow. These systems typically allow a customer to select their payment terms, which is helpful for a company that is not sure of its creditworthiness.
In the B2C world, flexible payments have proven to improve bottom-line performance. Instant credit providers, like PayPal, commissioned a study comparing all transactions to industry benchmarks. In a study, it was found that flexible payment options convert at a 70% higher rate than transactions without flexible payment options. B2B firms will likely see increased sales and customer satisfaction with these advantages. They will also see lower costs and lower risk.