Why Electronic Payment Options are a Must for B2B
With technology rapidly advancing, many businesses have cut down on—if not completely eliminated—their use of paper checks. As businesses explore electronic invoicing options, they are finding that electronic payments provide benefits to both the supplier and customer. Overall, there are quite a few different reasons that B2B companies are choosing electronic payment options.
E-Payments Save Businesses Money
In addition to being more efficient than paper checks, e-payments save businesses money in a number of ways. There are those often-overlooked costs with check-processing, such as printer, toner, and purchase of paper checks. In addition, there are costs associated with postage and labor hours, including physically taking them to the post office. E-payments reduce and eliminate these costs.
One of the biggest monetary benefits that B2B organizations gain from utilizing an electronic payment system involves dynamic discounts for paying early. Businesses that rely on paper invoices, as well as paper checks, are rarely able to take advantage of these discounts. This is due to the time it takes for an invoice to physically arrive at a business location, be approved, and for the payment check to be sent and received. With this much time being wasted, by the time the check arrives, the discount window has more than likely already passed. With electronic payments, businesses can finally take advantage of early-pay discounts by eliminating these tedious steps. Dynamic discounts save a company both money and time, and suppliers benefit from improved cash flow by being paid early.
Supplier Expectations are Changing
While some businesses may have to convince their suppliers to accept electronic payments, other businesses are finding that their vendors are actually asking to use electronic payment options. In fact, 63% of suppliers that were surveyed stated that they preferred to be paid electronically. There are various reasons suppliers may prefer electronic payment options. Some companies want to streamline labor costs and remove the processing of paper checks. Others want to get rid of third-party check processing companies or remove the need for lock boxes. Whatever the reason, many businesses are happy to accommodate the vendors with whom they have great business relationships.
Globalization and Fraud Prevention
As businesses become more global, sending paper checks to vendors halfway around the world comes with too many risks and unknowns. It’s important for enterprise businesses to keep their options of suppliers open to anywhere in the world, and to be able to properly pay them. With this need for international payments to work with suppliers in real-time, most businesses are finding it much easier to switch their entire AP system to have electronic payment options.
Additionally, with paper checks being relatively simple to forge and a lack of validation options, paper checks open the door to fraudulent payments. With electronic payment options, businesses are able to utilize a wide range of security checks to ensure that all payments sent and received are legitimate. With big name businesses like Google and Facebook having fallen victim to AP fraud, it’s important for enterprise businesses to recognize the very real risks of accounts payable fraud, and take whatever measures they can to prevent it.
Ease of Use
With the right accounts payable automation software, it’s easy for businesses to be able to pay an entire list of vendors within their system. Once a vendor has been set up for e-payment, it’s just a matter of selecting which invoices need to be paid. This happens without the need to input the same payment data over and over. In addition, the payment date can also be selected, giving businesses more control regarding timing than they would have using paper checks.
Electronic Payments: Simple and Beneficial
The benefits of utilizing electronic payments for B2B are seemingly endless. Some businesses may be hesitant to migrate to an e-payment system due to the perceived notion that suppliers are against it, or that it is hard to implement. With the right software, however, setting up electronic payment options is often easier than many think. Electronic payment options provide monetary benefits, convenience, and security, making them essential for any thriving B2B organization.