Businesses often view payment experiences as just another touch point for customers. However, technological advances have shown that digital payments can be a huge opportunity to help businesses grow faster and more efficiently.
Digital revolution has made it possible to transfer money via mobile apps and other b2b payment software. This is a huge shift in consumer payments. However, this is not true for many businesses’ accounting and finance departments. The majority of transactions and processes are still handled manually and on paper.
The pandemic has created many challenges in the digital B2B payments space. The drastic shift to digital tools and remote processing has revealed the inefficiencies and costly infrastructure gaps of a financial system that is worth hundreds of trillions of dollars. Yet, it still relies heavily on manual processes, slow moving checks and expensive paper invoices.
Comparison of b2b payment software and paper checks
Paper-based payments can be a headache for both customers and businesses. Printing and processing paper checks can be a costly task for businesses. A single check can cost between $4 and $20.
Paper-based payments are expensive and take about 15 days to clear. You can spend up to a month waiting for payment if you don’t account for mail float or any errors. This negatively impacts Days Sales Outstanding (DSO), and affects cash flow.
There are many complaints about businesses that no longer accept paper checks payments:
- Paper checks can slow down the payment process and cause frequent delays
- Businesses that accept checks are more vulnerable to fraud
- Reconciliation can be too labor-intensive and error-prone.
- There is no guarantee that a check will be tied to an account with enough funds.
- Customers have the option to stop payments or close their account.
- Remote capture is not available so it’s not worth driving to the bank.
- It is difficult to track the incoming check and know when the payment will arrive.
As if that weren’t enough, it has become more difficult for businesses to accept paper checks during the pandemic. This is especially true if you have a remote business and no one in the office can collect or reconcile mail checks.
Paying electronically, however, is much easier. Digital B2B payments are safer and easier to collect. The best part is that digital payments allow you to collect payments quickly and at a fraction the cost.
B2B payments
Through bank networks, digital payments transfer funds directly from customers’ accounts to your bank account. Accepting digital payments frees up time, money and energy for your business. Customers can make payments quickly and easily, and your cash flow will remain consistent and predictable.
This process is easy if you have recurring billing set up and automated payment collection.
Payment through b2b payment software allows you to process payments quickly, even the same day. This allows for instant cash application as well as automatic reconciliation. It has been proven that b2b payment software eliminates data entry errors and will ensure your books are accurate.
There are many advantages to b2b payment software over paper checks
- Convenience and accessibility: With b2b payment software customers can self-service their invoices and pay them from any location at any time. Customers can pay invoices and emails with just one click by clicking the “Pay Now” button.
- Lower risk: Online B2B transactions are more secure than traditional ones. They are processed through secure gateways that are difficult to alter. Many platforms are tightly regulated to protect your money.
- Payment details are easily traceable. Both merchants as well as customers both have easy access to payment information. You can track payments easily and avoid confusion by knowing where your money is at all time.
- More payment options equal faster payments: Numerous studies have shown that customers who are offered multiple payment options get paid more quickly, which can improve cash flow and allow companies to grow at a faster rate.
Reduce costs, time, and processing fees. There are many payment options that have fees or soft costs. This includes paper checks and paper checks. Fixed fees allow for easier planning and business can choose the model that best suits their needs. Some B2B digital payment platforms even forgo transaction fees altogether and instead use a payments-as-a-service model.
