B2B payments are the financial transactions between businesses to avail products or services. It can be a one-time payment or a yearly recurring payment an organization pays to other organizations for availing their services. B2B payments are slightly complex compared to business-to-customer (B2C) payments due to the string of approvals involved in the process. These payments usually include hundreds of thousands of rupees, and as a result, the process is complicated and involves various challenges that affect productivity.
In this blog, we have discussed the most common challenges of the B2B payment processes and suggested a few steps to overcome those to improve the process.
Interoperability Between Businesses
Every business operates differently and prefers different payment channels and terms for various reasons, from the mode of payment-to-payment terms and the rounds of decision-making. For instance, there may be a case where you prefer making payments via a corporate card that enables you to keep track of the transactions, but the vendor expects payments in cash. This could create a dent in the smooth process and can affect the business relationships.
Security Concerns & Breaches
As B2B payments involve hundreds of thousands of monies, there are high chances for fraud, and so are the security concerns. Furthermore, businesses should ensure that the crucial and confidential information related to the organization, clients, and stakeholders is secure. Security, such as business email compromise (BEC), can wreak havoc and affect the organization’s productivity. So, ensuring double-triple safety and compliance is imperative for businesses for smooth transactions.
Tedious & Time-Consuming Processes
In today’s technologically advanced business world, many organizations are still handling payment processes manually. Especially startups and SMEs still think traditional processes are the best and most cost-effective way to manage B2B payments and are yet to adopt automation technologies. With the manual processes, businesses can get stuck in the whirlpool of manually tracking the invoice data and verifying it against receipts notes, cross-team communication, etc., leading to loss of revenue and wastage of resources.
Fund Settlement Delays
Payments to the vendors have to be made on time to avoid penalties and communication gaps that can lead to contract cancellation. Even though you have processed payments on time, there are a few cases where the vendor will receive it lately. For instance, if you pay a vendor today via payment gateway facilities, the vendor has to wait at least 4-5 days to get funds. These fund settlement delays can break business relationships and impact the bottom line.
However, you can overcome most challenges of B2B payments by taking a few simple steps.
Settle Funds Instantly
It is always better to offer multiple payment options to the clients, such as IMPS, UPI payment links, RTGS, and static/ dynamic QR codes, to allow them to use their preferred choices. Instant payments are obviously the ones every business expects, and UPI helps you make payments instantly. Money can make or break relationships, and this old saying stands true for business relationships as well. So, when you can transact and settle payments instantly with automation, don’t keep your clients waiting for the payments.
Reduce Payment Collection Costs
Advanced accounts payable solutions such as SutiAP help you automate B2B payment processes and reduce the expenditure and time spent managing tedious tasks. It lets you create payment links and share them with partners, clients, or vendors via multiple channels to send or receive payments instantly. You can add beneficiaries, start transacting money immediately, and even track all the transactions anytime.
Reconcile Transactions in Real-time
The software allows you to centralize all the crucial financial data on a secured, cloud-based platform, allowing authorized people to access it anytime. Bid farewell to the manual processes with advanced accounts payable solution that provides you with real-time to ensure accuracy throughout the process.
Eliminate Security Risks
Identify the instances of fraud and security risks before they strike the business. Make sure to onboard every stakeholder, client, and vendor after KYC checks, ensuring the company operates with full compliance. Configure role-based permissions to restrict unauthorized employees from accessing confidential data.
Implementing automation is the ideal solution for avoiding challenges involved in manual, paper-based processes. The advanced accounts payable solutions allow you to automate the entire AP process, helping you pay vendors on time and maintain good business relationships. If you still rely on traditional, paper-based processes, it may be the right time to invest in a robust AP solution that perfectly suits your business needs and requirements.