Gartner’s Future of Sales research shows that by 2025, 80% of B2B sales interactions between suppliers and buyers will occur in digital channels. B2B buying behaviors have been shifting toward a buyer-centric digital model, a change that has been accelerated by the COVID-19 pandemic. Read this blog to know how perfect order fulfillment, accurate invoicing, accommodating a wide range of digital payment modes, and customer self-service portals can facilitate faster B2B payments.
What are B2B Payments?
B2B payments, or business-to-business payments, are the currency transactions occurring between two business entities for goods or services supplied. While the B2B payments ecosystem has revolved around paper-based manual processes for years, recent years have witnessed a major shift toward cloud-based, automated payments digital payment systems. This has not only simplified the buying and selling process but also made the way for efficient, faster B2B payments, resulting in timely cash flow and good working capital management.
B2B Payment Trends post COVID
Gartner’s Future of Sales research shows that by 2025, 80% of B2B sales interactions between suppliers and buyers will occur in digital channels. B2B buying behaviors have been shifting toward a buyer-centric digital model, a change that has been accelerated by the COVID-19 pandemic. As per the report, a greater rise in digital interactions between buyers and suppliers will break traditional sales models over the next five years. But what holds the key to faster b2B payments?
Two main accelerators facilitating faster B2B payments:
- Fulfill and invoice customer orders perfectly, making it “easy for them to pay you.”
- Perform collection contact to remind/persuade them to pay you.
The first option results in increased cash flow, proof of a great customer experience, and lower cost (no collection cost). Perfect order fulfillment is easily understood, but difficult to achieve all the time. So, how can you make your customers easy to pay you?
By meeting customer requirements and preferences for paying vendor invoices:
- Delivering your invoice to the customer fast via electronic (vs paper and postal mail) methods
- Meeting customer format and information requirements for vendor invoices
- Facilitating quicker payments by accommodating a wide range of payment modes including the large number of digital payment gateways that have emerged recently. Allow them to pay in the mode they prefer (recognizing you may have to restrict credit card payments because of the cost.)
- Accelerating funds availability by securing payments in electronic modes vs paper checks
- Provision of Customer Self-Serve Portals available 24/7/365
Reduction of O2C Cycle Time – Paper-based vs. Digital Invoicing & Payments
Proven technologies such as Artificial Intelligence, AI Digital Assistants, and Machine Learning, can provide all the capabilities needed to accelerate your B2B Order-to-Cash cycle time by as much as 23 days. The investment and implementation timeline are modest by IT standards, and can begin producing results in a few months.
The benefits of utilizing this technology to increase the frequency of “on-time, customer-initiated payments” include:
- accelerated cash flow
- enhanced customer experience
- reduced collection cost.