While business to consumer and consumer to business transactions are relatively hassle-free and often smaller in scale, business to business (B2B) payments require considerably more effort and a better degree of management skills for those who are in charge of the entire process. For making transaction and other related processes more customized, business require the use of state of the art techniques and processes to cut down on overall costs and other operational obstacles.
If you’re still not aware of what B2B payments are, they are a direct transaction between two different businesses. Once the transaction is done, the payments are made, thereby making a need for the payment system to pay for the products and services that were offered by one business to another.
So much is involved in B2B payments
The process of B2B payments can sometimes get pretty complicated because so much is involved. One has to prepare quotes and invoices, long hours go into planning every minute detail and numerous departments are needed for the budgets. It is vital for the business to handle payments in an appropriate manner in order to nourish the long-lasting relation between the two businesses. Here are the few ways in which one can make B2B payments:
- Credit cards
- Paper checks
- Online payments
- Electronic transfers
- ACH or Automated Clearing House transfers
The present day has embraced the digital age and henceforth the payment systems have also become digital. Moving from checks and cash, businesses are now accepting credit cards for making online payments. This change has brought several benefits such as:
- Easy credit access and immense convenience
- A business can keep a detailed track on all transactions
- In case there’s a dispute, there will always be a support system to help settle them
Nevertheless, just as anything has its advantages and drawbacks, the B2B payment system is not an exception. Here too, there are a few drawbacks, such as:
- Utilizing digital payments are cumbersome and complex
- There’s no guarantee of security and anyone can hack
- Due to additional costs, the process is rather costly
- The process of invoice takes pretty long
Pain points of B2B payments and how to resolve them
A poorly managed payment system can hold a business back and can even cause damage. Here’s help to make sure this does not happen to your business.
Auditing is undoubtedly one of the biggest hurdles which could call for IRS investigations and reviews by investors for your business. You’ll require every single transaction detail for the audits to be successful and all vital documents should be at the tip of your fingers in case of a potential audit.
- SECURITY OF DOCUMENTS
If there’s a single error with a transaction, it can take many hours to search for what went wrong. During such instances, you should have all documentation and file work done online as this can be a lifesaver during instances of major glitches.
- REMITTANCE STORAGE
Remittance information includes documents which you create, hold and store while the transaction is done with a customer or in this case, another business. Invoices, receipts, reports, numbers of customers are a few examples of such documents. You should ensure sending the right invoice to the right person at the appropriate address. In case of any errors, all transactions will be monitored.
If your business accepts B2B payments, you will definitely face the above listed issues. But you need to master the art of handling such situations with expertise and smartness so that they don’t cause harm to your business. Otherwise, you may be in a position where audits or security become big issues with your B2B payment systems.