Sending and receiving payments can be quite lengthy and complicated. But implementing a B2B payments solution for your business can help make the process easier. With an efficient global payments solution in place, you can focus on what matters most—your company’s growth.
In this blog post, we’ll be discussing the benefits of B2B payments, popular payment solutions, and step-by-step instructions on determining the best payments solution for your business.
Few things are more crucial to your B2B customers than a smooth payment experience. The ability to provide an effective payment flow, including flexible payment schedules, numerous payment alternatives, and a frictionless overall experience, can improve brand reputation, user experience, and customer retention.
When it comes to managing your B2B payments, keep in mind that solutions vary depending on whether you’re processing domestic or foreign payments. In this section, we’ll go over the various payment processing alternatives available to you, such as ACH bank debit, wire transfers, and global business accounts, and which ones are most likely to benefit your consumers.
What Is a B2B Payment?
A business-to-business payment or B2B payment is a payment between two related companies. These payments are the financial transactions of one company to another company within the same industry. Depending on the companies‘ agreement, this payment can either be a one-time or recurring transaction.
Simply put, B2B payments refer to any money traded between businesses for goods and services. B2B payments adhere to their own set of protocols and best practices. B2B transactions sometimes include bigger sales volumes and recurrent orders than customer-facing sales. As sales pass through various departments for processing and approval, there may be more people involved in each transaction.
Any good B2B payment system must be able to meet these specific requirements. Wholesale trade, manufacturing, and professional services are examples of industries that routinely process large volumes of B2B payments.
What exactly is a B2B payments system?
Many B2B transactions include lengthy payment cycles, recurring purchases, and a lengthy chain of internal approvals. A B2B payment system is intended to address each of these distinct difficulties, generally through automated software. From raising bills to processing payments, digital technologies guide each transaction through the essential processes.
Most B2B payment systems today include electronic invoicing and automated payment processing. You can save money by automatically sending invoices to your business clients. Recurring payments also make it simple to pay invoice balances and monthly installments, which is very useful for subscription services.
Benefits of Using a B2B Payment Solution
If you’re wondering how this could help your business, listed below are the few benefits of using B2B payment solutions.
Faster Payment Processing
You have the option to transfer funds electronically via the Automated Clearing House (ACH) network, which means funds travel more quickly, and there’s no need for paper checks in the mail.
You Can Save Money and Time
Using these payment methods can be more cost-effective and time-effective than traditional payment methods. In addition, batch processing fees through these payment solutions are also cheap.
It’s Easier to Keep Track and Organize
B2B payment solutions are ideal for companies as it makes the whole payment process simpler and more streamlined. As a business owner, you may create paystubs more efficiently since you can quickly track your employee’s payment history, benefits, and deductions.
You can also opt to process payments by batch. Batch processing payments means you’ll be able to keep track of every transaction, creating a solid financial record and ensuring nothing gets lost in translation.
Payment options for business-to-business transactions
Businesses, like any other, can accept the payment method of their choice. However, utilizing cash and paper checks is becoming increasingly rare. Typical B2B payment options nowadays include:
- Credit cards: While card payments are popular for B2C purchases, they are less typical for large, recurrent B2B payments.
- Wire transfers: Global companies such as Western Union facilitate wire transfers, which are electronic transfers of funds between corporate accounts. The procedure is quick, however there is a large charge involved.
- Online payment gateways: Online payment gateways such as PayPal, Stripe, and Square benefit small businesses. Some of these work in tandem with digital invoicing to create a more efficient B2B checkout experience.
- GoCardless provides a pull-based direct debit solution that is excellent for accepting recurring payments and managing supplier invoicing. Businesses can accept authorized payments straight from their customers’ bank accounts, avoiding card surcharges and invoice processing delays.
Popular Global B2B Payment Solutions on the Market
There are a lot of companies that provide quick and easy B2B payments. This post is going to highlight our top 5 picks out of this category.
Paypal
PayPal is great for B2B companies because businesses of all sizes can use it. It’s also super easy to set up and manage your account. In addition, it can accept worldwide online transactions, and you can also accept credit and debit card payments.
The drawback with PayPal is that it usually takes a long time before customer service responds, which can turn off, especially if problems occur within the transaction.
Transferwise
This solution is great for businesses that require smaller transactions and low costs. It has a transparent pricing structure which makes it easier to understand where your money goes at the end of each transaction.
Moreover, it can handle large money transfers and has a multi-currency account. However, a recipient must have a Transferwise account to receive the funds.
Payoneer
This payment solution allows businesses to send money to over 200 countries, even if the receiver doesn’t have a Payoneer account. In addition, it accepts credit and debit card payments as well as bank transfers through the ACH network.
The downside is that this B2B payment service has a high rate and exchange fees compared to other solutions.
Stripe
Stripe makes it easy for B2B companies to collect and manage payments online. It also accepts credit card and bank transfers through the ACH network. However, this solution is limited in its client base as they only cater to clients living in certain countries.
Remitly
This payment solution is great because it’s purpose-built for B2B transactions. It also offers competitive rates and fees, making this a cost-effective solution compared to other providers in the market today.
It has an easy setup process that beginners can easily understand, making things less complicated when getting started with their service. The drawback with Remitly is that it takes 3-5 business days before you can receive the funds in your bank account.
How to Determine Which Payment Solution Is Best for My Business?
This perfect option that will work for you will depend on the size of your business. You have to consider many factors before choosing a suitable payment service provider that is perfect for you.
Let’s take a look at some steps to help with your decision.
Identify the Most Critical Payments Needs
Identifying the payment your business needs can help you find the payment solutions to help you achieve it.
For example, if you frequently have large transaction volumes, you may want to consider solutions that offer batch processing payments and bulk invoice generation.
Moreover, if you have foreign exchange transactions, you can opt for payment services that support foreign currency accounts.
Compare and Contrast Solutions
After deciding which solution you want to use for your business, it’s time to do a side-by-side comparison and contrast.
This will help you determine the best payment service provider that can meet all of your transactions needs. However, it should be noted that no two providers are alike when it comes down to meeting these needs. Therefore, make sure to look at how each service works and compare their rates and fees.
Implement a Solution That Will Best Suit Your Business
After you’ve decided on the payment service provider to help your business achieve its goals, it’s time to implement a solution.
Since each of these solutions works differently, you must test out all processes associated with this new system so that you will be able to teach others within your team correctly on how to use it.
Monitor the New Payment Process Closely
Once you’ve implemented the payment solution, monitor it closely and make adjustments if necessary.
This will help you ensure that your company gets the best B2B payments service possible, leading to a more efficient workflow within your business structure. In addition, this reduces the chance of personal bankruptcy hence higher profits.
Review Performance of New Payments Solution After Implementation
After implementing the payments solutions, determine if you were able to receive all expected funds and if the clients, on the other hand, were charged with high fees. It’s important to know if you received the correct amount since any discrepancies can set you back on your financial goals.
Integration
Does the solution work with your existing small business accounting software, payment gateways, and management systems? The finest systems will connect all of these tools for a complete financial picture.
International trade
Many business-to-business payments entail cross-border transactions. Does the payment platform convert numerous foreign currencies into USD/EUR automatically? Is it compatible with your supplier and vendor regions? What are the international transaction fees?
User friendliness
The top B2B payment systems include a payment interface for both your Accounts Receivable department and your clients. Give clients a straightforward way to pay to enable faster, more dependable payments.
Methods of payment
What types of B2B payments does the system accept? Is your company accepting card payments, bank transfers, or digital wallet payments? Check that the most popular B2B payment methods are all supported.
Automatic billing
By invoicing consumers immediately following the transaction, you will encourage prompt payment. A system that sends automated follow-up communications as payments become due is also available.
If everything goes well, you have found the B2B payments solution that will work best for your business.
Conclusion
A B2B payments solution is a must-have for businesses that are looking to optimize their operations.
Each payment service provider has unique features and functionality, which can be beneficial depending on your business type, size, and other factors. Hence, you must do an in-depth analysis of B2B providers first before deciding on the best one for your business transactions structure.
This will help you ensure effective processes within your company, thus helping achieve better results with minimal hiccups along the way.
