Automated B2B transactions - Front-Commerce

B2B payment systems are automated systems that allow businesses to perform transactions with one another at the same level of efficiency, speed, and convenience that customers perform transactions. But despite their immense potential, B2B payment systems have grown at a significantly slower rate than their B2C counterparts. For instance, customers no longer make payments with paper cheques. 

Electronic payment methods have taken over the consumer space and the same is expected to occur in the B2B space before long. In this article, we will be looking at how automated B2B transactions can streamline your business.

How Are B2B Payments Automated Today?

By now, you should have an idea of the benefits offered by automated B2B payments. But before we delve deeper into that, let’s explain how these payment systems work.

Before now, it was quite normal for businesses to go through long processes before processing and validating invoices. This delay is majorly due to their outdated manual approach. Physical and digital invoices must be prepared carefully before they can be approved and issued. As the invoice is moved from one office to the other, the processing time gradually increases. Also, the invoice might remain on one desk for days if a signatory is unavailable. The introduction of automated B2B payment systems have proven to be a game-changer. 

Automated B2B payment systems offer businesses a modern and more efficient solution.  A report from Goldman Sachs shows that payment automation helps accounts payable staff save up to 80% of their time. Additionally, payment solutions that feature SaaS models are known to speed up approval rates. 

Since automated payments are processed electronically, they are much faster than a manual process. They also make three-way matching easier for firms since employees will be able to obtain purchase orders from financial systems and attach invoice documents for reference. Additionally, approval workflows will indicate the right approvers based on the firm’s rules or guidelines. Hence, payments processing that would normally require several weeks will be completed in a few days.

However, some payment automation systems are more advanced than others. The advanced solutions handle more than just the digitalization and streamlining of invoicing. They are versatile enough to process different kinds of payments at great speed.

Here are some of their features:

  • Character recognition through AI
  • The ability to identify invoice and claim patterns
  • The conversion of invoice and payment information into accounting codes
  • Ensuring prompt payments through automated approvals and notifications
  • The ability to support various payment methods and pay outside the system
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Strengthen Your Business With Automated Payments

The days of checks and wire transfers are long gone. An automated business-to-business payment system will transform how you run your business by streamlining your tasks. In this section, we will be providing you with well-detailed reasons on why you need to strengthen your business with automated payments.

1. Streamlined Data Entry

The traditional payment processing system requires account clerks to handle the data in each invoice manually. This method of data entry is highly susceptible to errors. It can also result in the creation of duplicate invoices or loss of invoices. These mistakes occur mainly because accounting clerks must keep repeating boring and tiring tasks.

What’s more, a single error during data entry usually results in broader issues as the document moves from one accounting system to the other. There’s hardly any business that hasn’t experienced one of these issues. Now, imagine the amount of time and resources that you will be saving when your accounting department no longer has to carry out these repetitive tasks. 

This is the most advantageous benefit of a payment automation tool. The software uses a character-recognition technology that doesn’t require any manual input. It simply transfers the payment data directly from the invoice to the accounting software. This way, all chances of data entry errors are eliminated. So, you won’t have to worry about processing a duplicate invoice or making a wrong payment.

2. Better Control

Your firm’s financial data must be saved and managed efficiently and accurately; this will be easier to achieve when automated B2B payments are processed via a single digital system. As we mentioned earlier, utilizing an automated system will help you eliminate the chances of human error. You can also combine many of these systems with your current ERP (enterprise resource planning). This way, you can streamline your processes even further and improve their performance with AI technology.

Additionally, an automated payment system is guaranteed to offer you greater flexibility. The most advanced automated payment solutions will enable your business to process both modern and traditional payment methods. So, you will be able to transact with customers that prefer paper checks while managing things via a digital system with greater efficiency.

Another way by which an automated B2B payment system can give you better control is by allowing you and your staff to work remotely. All payments can be made virtually from any location, so you won’t have to worry about visiting banks or post offices.

3. Lowering Costs

Automated B2B payment solutions provide businesses with greater control over their cash flow. You will be able to receive B2B payments automatically, reducing debtor days. An effective way of lowering operating costs is to prevent your credit card payment fees and other fees associated with conventional banking from rising. Several payment automation service providers work with fixed monthly rates instead of charging customers per transaction. You will find this highly valuable as your business grows.

4. Facilitating Growth

You can aid your firm’s growth by choosing payment automation. It creates a scalable system that grows with your business, so you don’t have to invest more valuable resources on your team. There is a good chance that your B2B expenditure expands along with your business. Since larger firms perform lots of transactions daily, you may need a bigger team and more resources if you stick with traditional payment methods. The good thing about B2B payment automation is that it is completely scalable. You won’t have to increase your overheads since you will be able to add new expenses with the press of a button.

5. Advanced Security

Since several B2B transactions usually involve high-value orders, the importance of security can’t be overemphasized. Security is also essential for small businesses because they offer a wide variety of payment options.

You can be assured that your payments will be secure with an automated payment system as most of them come with built-in security features. They are designed to prevent cyberattacks and other fraudulent activities. Your customers will also have more trust in your business when you use a secure payment system.

Additionally, an automated B2B payment system will automatically make your business compliant. So, you won’t have to worry about that separately.

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Examples of Automated B2B Payment Platforms

There are different types of automated B2B payment platforms that you can use for your small business today. Let’s look at the major options:

1. Credit Cards

Credit cards are the go-to option for several smart merchants when they need to process B2B payments. They provide an affordable, fast, and simple payment solution that improves cash flow. Merchants also get monthly statements that enable them to track their payments easily. However, it is always a good idea to handle a credit card like a debit card. Your payments will be free of interest when you balance your payments monthly.

2. ACH

ACH stands for Automated Clearing House payments and they enable U.S. businesses to communicate payments with one another digitally. This makes transfers faster and more efficient than traditional payment methods. To use this payment method, all that you need is a routing number and the account details of both businesses. ACH payments are easy to track since they also offer monthly statements. If you already use business software like the Enterprise Resource Planning system (ERP), you can integrate your ACH payments with it

3. Digital Payment Platforms

Digital payment platforms are becoming an increasingly popular choice for automated B2B transactions. They help merchants to make, accept, and process payments faster than ever. Some of the best digital payment platforms that are available today include:

 Digital payment platforms are proven to not only be efficient but also practical. Your account can be accessed through your mobile device or PC. You can also decide to install an application or visit their website. 

They are the best option technologically as well. When considering a payment method or platform, you must also consider your overall choices in terms of tech solutions and your business. By moving to, or choosing, a headless B2B commerce platform, you will have the flexibility of choosing not only the payment platform or solution of your choice, but also the freedom to integrate it easily with complementary solutions, such as a sales and ordering platform.

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More and more merchants are choosing automated payment solutions to make their payments processing faster, more convenient, and more efficient. However, you should consider the practicality of your preferred payment system. For instance, the payment system should support international transactions if you will be importing products. You should also ensure that your preferred payment method can be integrated with your existing accounting tools. Finally, the system should be easy to use and have good reporting capabilities. All this is easily obtainable if you have a flexible and agile B2B commerce platform in place. Contact us to learn more about the advantages of a headless platform for B2B commerce.

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