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The Pains, Problems, and Solutions of B2B Payment Processes

The old saying “time is money” has, perhaps, never been more relevant than it is today.

The world is moving at an ever-quickening pace - especially the world of business. With technology at the helm, processes that used to take hours, days, or even weeks can now be completed with a simple press of a button.

The key word in that last sentence, though, is “can.” In an ideal situation - one in which every single cog in the wheel is running optimally - business processes and plans can go off without a hitch. 

Unfortunately, there are a number of things that can go wrong during these processes, as well. In turn, this could lead to wasted time and lost money for all involved parties.

In this article, we’ll take a look at some of the most common issues faced throughout the B2B payment process, and explain the possible reasons these issues may arise. For each issue, we’ll also quickly discuss some of the technological advancements that have recently been developed that ultimately solve the problems being faced.

Let’s get started.

Common Problems in the B2B Payment Process (and Their Solutions)

It goes without saying:

If your company’s payment processes aren’t streamlined, you run the risk of not just losing time and money up front, but - because of it, your clients may choose to cease doing business with you if they face major difficulties - you also run the risk of losing potential future revenue, as well.

Below are some of the more common “hangups” B2B companies face regarding their payment processes - as well as some of the ways in which you can circumvent these issues moving forward.

Payment DelaysPayment Delays

First and foremost, let’s look at delays in payments made and received.

On the one hand, your clients may, from time to time, be late in making a payment for services rendered (or services to be rendered). This opens up an entirely new process, in which your company will need to contact the client, notify them of their delinquency, charge a late fee, and possibly deal with a dispute. In the meantime, you certainly won’t be providing any value to your client (and vice-versa). No matter the outcome, all of this will certainly lead to an overall loss for your company.

On the other hand, perhaps it’s your company whose slow accounts receivable processes are gumming up the works, so to speak. There are a number of reasons for this occurring, which we’ll discuss momentarily. Essentially, it comes down to either human error or technological glitches - neither of which are acceptable.

Solution: E-Invoicing

To ensure alignment regarding how much your client owes and exactly what they should expect to receive from you (as well as how and when they should expect to receive it), you might choose to adopt the process of e-invoicing

E-invoicing automates the delivery of invoices to and from clients, ensuring the correct party receives the proper documentation immediately. Additionally, e-invoicing also ensures that all parties remain “on the same page,” outlining the exact process of what’s to come once payment is received.

Business Payment MethodsPayment Methods

The method by which payments are made and received can also cause major problems throughout the B2B payment process, as well.

For one thing, some options simply take longer to process than others. For example, if a client pays by check or money order, a number of verification steps stand in the way of making the monetary transaction “official.” Again, both parties will have to play the waiting game while these processes take place.

But, if the payment methods your company accepts don’t align with a client’s preferred method of payment, another problem arises. Perhaps you accept Visa and Mastercard, but not Discover - which is exactly what your potential client’s company uses for B2B purchases. Or maybe they’ve switched to Apple Pay, and you’ve yet to implement the technology to accept such payments.

Whatever the case may be, if you and your client aren’t in alignment about how payments will be made, you’re both going to end up losing out.

Solution: Mobile Payments

Simply put:

The onus is on you to ensure a lack of payment options doesn’t get in the way of a business deal. 

More and more, B2B companies are shifting toward using mobile payment options - such as Apple Pay, Android Pay, and so on. In addition to these methods, most major credit cards offer the ability to pay via the company’s app (rather than physical credit card), as well.

So, if you haven’t already, you absolutely need to making the shift toward accepting mobile payments.

payment portalsIsolation Throughout the Payment Process

With regard to the B2B payment process, isolation can occur in one of two ways.

The first thing to consider is that B2B purchases involve way more than a single person from each party. Multiple individuals from multiple departments have a hand in the process at a number of different stages. Understanding this, it’s clear how easy it can be for things to go off the rails: a lack of internal and external communication - from either party - can lead to disaster.

Secondly, as mentioned in the previous paragraph, the B2B payment process involves a number of steps, as well. Once again, misalignment or miscommunication between both parties could cause a deal to fall through at the eleventh hour.

Solution: Payment Management Platforms

In addition to providing clients with a variety of payment options, payment management platforms allow companies maximum visibility of the payment process. 

Acting as a central hub for all things payment-related, payment management platforms allow anyone within an organization to quickly see who’s responsible for completing current tasks at hand, as well as when and how payments are due to be received and services due to be rendered. 

As has been a running theme throughout this article, alignment between all involved parties is key to a streamlined B2B payment process. Utilizing a payment management platform is, perhaps, the best way to ensure this alignment throughout the payment process.

Secure Payments for business transactions

Security Issues

As we’ve discussed, much of the modern B2B payment process is completed electronically, through web-based services. 

That being the case, security is a major concern for most B2B customers. With major data breaches and leaks occurring on a seemingly constant basis, your customers need to trust that their money and information is safe with your company.

On your end, this means you need to be able to guarantee your client’s safety before they’ll even think of doing business with your company. This guarantee should stem not just from a statement made by your organization, but in the processes you utilize to accept payments, as well.

Solution: Blockchain

Blockchain refers to an extremely secure transaction network through which information is passed from one party to another (in our case, monetary payments passed from client to company).

Without getting too technical, information sent via blockchain is highly encrypted - meaning outside parties simply wouldn’t be able to make sense of it even if they were able to access it. Additionally, blockchain technology ensures that the information received is the exact information that was sent in the first place - ensuring technical glitches that could lead to major problems on either end don’t occur.

As alluded to earlier, your clients know that hackers and other black-hat programmers are always looking for weaknesses in systems in order to steal data from individuals and companies alike. Using blockchain technology, you can assure your customers that their data will always remain safe and secure.

Payment Cost

There are a variety of B2B payments available. Each comes with its perks, its weaknesses, and a cost. Below are the typical forms of payment and their expected fee per transaction.

The cost of B2B Payments

Through the AFP Payments Survey, we can see that the paper check is still the most prevalent form of payment accounting for 51%.

Percent of B2B Payments done by check.pngThis type of payment brings with it a long float time and manual labor, but processing cost is far less than that of a credit card that takes a financing fee that is a percentage of the purchase.

Solution: A Preferred Payments Mix

For the majority of B2B transaction, especially when it comes to large sums of money, ACH payments make the most sense, they are a minimal cost per purchase and have a small transaction fee. Unfortunately, ACH is tough to execute for international orders. Therefore a business will need to decide what payments are preferred based on transaction size and geographic origin.

Net terms accounts receivable

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Apruve enables large enterprises to automate long-tail credit and A/R so you can stop spending 80% of your time and resources on 20% of your revenue. We partner with each of our customers to solve their unique credit, payment, and accounts receivable challenges and build the right credit solutions for your markets, customers, and goals. 

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