There are very few businesses out there that don’t rely on some sort of partnership with another organization. That “do it alone” attitude has lost its place in the business world. In fact, one study says that 60 percent of businesses believe that 35 percent of their annual revenue is influenced by external parties.
Partnering with other organizations, whether purchasing raw materials, buying access to software, or outsourcing business functions, can help you increase your company’s profits. But with these relationships come challenges, many of which relate to vendor payments. The good news is that the entire business-to-business (B2B) sector is shifting as a whole. Most companies are implementing automation software that can make the entire payment process easier for all parties involved.
If you’re behind on integrating new technology into your B2B supplier payment processes, you’ve come to the right place. Keep reading to learn how to do B2B payments better.
Business-to-business companies often face unique challenges when it comes to the Accounts Payable (AP) process. In order to streamline and optimize automated B2B payments, it is essential to understand the various challenges that can arise.
Still, automating B2B Accounts Payable is the only logical move for business owners today.
B2B payment automation is the process of using technology and software to streamline invoice processing, payment approval, and payment delivery to vendors or suppliers. Automating this process addresses and minimizes many common challenges that organizations face with B2B Accounts Payable.
Automating B2B payments can save time and money while reducing the risk of errors. In addition, payment automation can help businesses improve their cash flow and manage their finances. Several different B2B payment automation software or service providers are available, and each has unique features and benefits.
Automation software or service providers streamline B2B Accounts Payable for organizations. While the exact steps may vary slightly, the process typically looks something like this:
While automation does require an initial setup and an adjustment period for accounting teams, the benefits a business sees from B2B payment automation are definitely worth it. Some benefits include:
Automating invoices is a great way to save time and money. You can expect your cost per invoice to drop dramatically, potentially eliminating the cost of printing supplies and mailing costs altogether.
The initial setup may take some time, but you only have to do this once. After that, the entire payment process will be completely automated, limiting the requirement for hands-on attention from employees. Data will be extracted automatically, reconciliation will be immediate, and batch approvals only require a quick confirmation. Streamlining B2B payment automation will ensure your vendors get paid on time, every time.
If you automate B2B payments, you increase your chance of taking advantage of discounts offered by vendors for early payments or other specific payment terms. Also known as dynamic discounting, this can save your business money just for paying on time.
On top of finding discounts, B2B payments automation can help you take advantage of cashback incentives that are sometimes offered when making supplier payments with virtual or traditional credit cards.
The use of virtual cards also lowers security risks when making online payments to B2B vendors. In general, having complete visibility of the entire B2B Accounts Payable workflow, you catch fraudulent charges quickly and put an end to duplicate payments, unapproved vendors, or false billing.
Paying your supplier bills on time will help foster a strong relationship with your vendors. These healthy connections with other businesses will help you raise your revenue in various ways.
The data capabilities offered by automation software are unrivaled. Your accounting team will be able to search invoices by date, invoice number, payment amount, or multiple other factors. Easy-to-read payment data can help you plan for the future.
When you automate B2B payments, you do away with the need for hard-copy records. Digital storage is not only easier to sort through and analyze, but it’s also cheaper and better for the environment.
There are many different software solutions or third-party automation providers that can help your business step into the twenty-first century and transition to automated B2B payment solutions. For example, P3 Cost Analysts has years of experience helping business owners like you reduce the costs of paying vendors.
Whether you’re still paying other businesses by check or you see the potential to maximize more rebates through virtual card spending, P3 can help. At P3 Cost Analysts, we will help you do B2B payments better!
Our AP automation tool integrates with any system you’re currently using, helping speed up the learning curve when implementing new processes. From there, you and your team can handle all your B2B payments in one easy-to-use interface.
We will help you maximize monthly rebates, reconcile payables immediately upon batch approval, pay vendors how they wish to be paid, and more. And with no subscription fees, what do you have to lose?
As technology advances and changes the standard operating procedures of B2B commerce, you don’t want to get left behind. Unfortunately, the challenges that face Accounts Payable will only get more complex as technology advances. But, when you move to automated B2B payments, your company can take advantage of the latest software to stay competitive in an ever-changing market.
The benefits of B2B payment automation are tenfold, but the stress of changing processes may cause some business owners to hesitate. However, with experts like P3 Cost Analysts guiding you through the process, you’ll wonder why you didn’t automate sooner.
Learn more about our vendor payment solutions by scheduling a free consultation with one of our experts.