A Guide to B2B Payments: How to Boost Your Cash Flow

What Are B2B Payments?

B2B payments refer to transactions between companies to purchase goods and services. Unlike B2C payments (which involve individuals), B2B payments are more complex due to various factors such as transaction volume, frequency, industry-specific needs, and the involvement of multiple teams.

Most Common B2B Payment Methods

1. Checks: Surprisingly, around 40% of B2B payments in the US are still made via checks. Buyers typically receive an invoice, issue a check, and mail it to the seller. However, this method has downsides, including the risk of checks getting lost in the mail and manual processing.
2. ACH Payments: Automated Clearing House (ACH) is an online network processing large transactions. It's the second-most-used B2B payment method, especially for business transactions and larger retailers.

What Is a B2B Payments Platform?

A B2B payments platform is a specialized system that facilitates seamless financial transactions between businesses. It streamlines cash flow management, accounting, and tax payment processes. By adopting a B2B payments platform, companies can optimize transaction costs and improve efficiency.

Benefits of a B2B Payment Platform

1. Efficiency: Faster payment processing and reduced administrative overhead.
2. Cost Savings: Lower transaction fees compared to traditional methods.
3. Security: Enhanced data security and fraud prevention.
4. Visibility: Real-time tracking and reporting of payment status.

Challenges Associated with B2B Payments

When choosing a B2B payment platform, consider:

1. Compatibility with ERP: Ensure it works seamlessly with your existing software.
2. Security: Look for bank-grade encryption, tokenization, and blockchain technology.
3. User-Friendly: Will your clients find it easy to use?

In summary, many payment methods carry hidden costs, extra fees, and additional manual labor. That's why choosing the right payment options for customers should depend on your business model and needs.

Our recommendation: Find a B2B payment system that supports several payment methods and is compatible with your accounting software or system of record.

For more details, read our full blog post on B2B Payments.