B2B payment solutions: Everything you need to know

As a business owner, you need to provide customers with a convenient way to pay you. Relying on dated business-to-business (B2B) payment methods, like cash or check-only payments, may introduce unnecessary inconveniences and growth limitations to your business.

Adopting digital B2B payment processing solutions can enhance customer satisfaction and position your business for sustainable growth in an increasingly digital marketplace. To determine if digital payment solutions are the right option for your business, keep reading to learn more.

What you’ll learn:

• B2B payments are transactions between businesses, usually via bank transfers, digital wallets or checks. Some methods offer faster processing and greater security.
• Adopting digital B2B payment solutions can help streamline transactions, enhance customer satisfaction and position your business for growth.
• Capital One’s corporate payment solutions provide real-time tracking, enhanced security, flexible expense management and more. 

B2B payments are transactions between two businesses, such as a retailer and a supplier. Unlike B2C (business-to-consumer) payments, they’re often—though not always—made on a recurring basis and billed in arrears, which means the client pays after the services or goods are delivered.

With this billing method, the client may receive an invoice during or shortly after delivery and has a set number of days in the billing cycle—typically 30 to 90 days—to pay it. Since B2B payments often rely on invoicing and billing cycles, it may take weeks—or longer—for you to be paid for the services or goods you provide. 

B2B payments can happen in different ways, like bank transfers, digital wallets or checks. The process usually starts with the payer initiating a payment, which moves through a financial network until it reaches the payee.

Depending on how the payment is sent, it can take a few hours to a few days to finish processing, with some methods being faster and more secure than others.

B2B payments usually involve multiple departments in both businesses (like accounts payable and procurement) and financial institutions that approve and process the payments, further delaying the deposit. The bright side is that you can use several different payment methods for B2B payments, some of which may help speed the process or provide other benefits.

There are several B2B payment methods, including digital options. Popular B2B payment types include the following:

• Digital options: Secure and convenient digital payment gateways or platforms allow clients to pay for their purchases online. However, they may take time to process, and digital payment platforms often charge fees for their services. Some examples include ACH (automated clearing house) transfers and digital wallets like PayPal®.
• Debit or credit card payments: Accepting card payments allows suppliers to receive revenue almost immediately and simultaneously allows buyers to pay the transaction off over time if needed. Businesses that accept cards for payment may pay a small fee for each transaction and must possess the equipment necessary to take card payments. One-time virtual cards also fall into this category.
• Wire transfers: A wire transfer is one of the most immediate B2B payment methods, with money typically available within a few hours. They are secure, between-bank payments routed through a financial network and facilitate direct transfers of large sums with minimal risk of fraud or delay.
• ACH transfers: Automated clearing house transfers are secure, reliable payments between two banks and may take a few days longer to process than standard wire transfers.
• Cash: Cash is the fastest payment method and doesn’t include extra fees or costs. However, it does have risks. Money may be lost, stolen or damaged without proper safe storage options. Paper currency can also be counterfeit.
• Checks: Whether paper or electronic, checks are often slow and sometimes not very secure. Paper checks may be lost, stolen, damaged or returned due to insufficient funds. Electronic checks, while more efficient, may still be subject to processing delays and potential fraud, making them less reliable compared to other digital or electronic payment methods.

Businesses, large and small, are trending toward using automated and digital B2B payment solutions for the advantages they offer. B2B payment automation may help you better monitor your cash flow, provide higher levels of security and simplify accounting workflows, all without disrupting your clients’ experiences with your business.

Automating allows for the following:

B2B payment automation offers benefits for monitoring cash flow and managing client relationships. Digital and automated payment methods typically offer more security and reliability than cash or checks, which may be damaged, go missing, bounce or be fake. This helps preserve your earnings and minimize losses.

Many automated payment services also provide your business with detailed reports to help monitor your cash flow. These reports can help you identify patterns and plan accordingly. Reports may also offer insights into your clients’ payment trends and reliability, allowing you to make informed decisions about their contracts and the terms of your relationships.

Physical checks or cash payments can be misplaced, overlooked or recorded incorrectly during bookkeeping. Automating B2B payment solutions can minimize the risk of human error and make accurate recordkeeping a reality.

With digital and automated payments, the system should keep an accurate and detailed record of each payment. Some services may even integrate with your accounting software, simplifying internal recordkeeping and tax processes.

Automating enables more efficiency and helps streamline accounting processes that can positively impact your business overall. Automated B2B payments means your employees will spend less time handling, processing and recording physical payment methods or correcting human errors during those processes, freeing them up to focus on more critical tasks.

For similar reasons, B2B payment automation may also benefit your clients, as digital payments are often faster and easier for their accounting teams to track and record. Overall, B2B payment automation offers savings related to more efficient labor, reduced processing fees and fewer human errors.

Sending paper checks or cash through the mail may leave you and your clients vulnerable to unfortunate situations. Payments may be stolen or tampered with or sensitive information displayed on checks may be recorded and used for nefarious purposes. With digital B2B payments, the risk is considerably lower.

Reliable payment gateways and platforms typically employ entire teams dedicated to securing payments and sensitive information against hackers or data breaches using state-of-the-art cybersecurity approaches. It’s also considerably easier to track payments digitally than through paper mail.

The best payment solutions typically help you track and pay invoices more efficiently, manage cash flow better, flexibly control employee spending and manage liability, compliance and other financial risks.

You get all this and more with Capital One’s Corporate Payment Solutions. Capital One’s cloud-based payable solutions simplify your invoice payments to save time, improve your cash flow and benefit your vendor relationships by minimizing manual processes with innovative technology.

For example, Capital One’s Merchant Services, powered by Worldpay, allows businesses to accept payments from major credit cards, gift cards and loyalty cards using swipe, EMV and contactless methods. Platforms like PayPal, Apple Pay® and Google Pay™ are also accepted.

Capital One payment-processing solutions provide access to your payments typically as soon as the next business day. Transparent account reporting and a suite of data security tools are available to help you stay on top of your business’s cash flow and client experiences.

The cost of doing business is real; finding ways to minimize expenses while maximizing efficiency is critical to the health of your business. Transitioning to digital solutions can make transactions smoother, improve cash flow, simplify accounting processes, save time and offer more security than traditional B2B payment methods.

If you’re ready to transition from dated B2B payment solutions to a digital solution platform that may even earn you rebates and rewards for your organization, check out Capital One’s Accounts Payable Solutions today.