Plethora of Digital B2B Payment Options
Many companies and even banking institutions can offer you automated vendor payments. There are even companies in the marketplace that can pay a few vendors at a time. But you may need to pay hundreds of vendors each month, view the original invoices, and retain detailed records of who approved the payment.
So that may point you in a direction of an automated payments provider that also offers AP automation services. That way, you can ingest and process your invoices and then see those same invoices when you pay them.
Or, you may already have a property management system/GL that does some of the invoice processing for you and you just want to bolt on an electronic B2B payment component.
Either way, there are quite a few options. But before you take the plunge, here are five questions you should ask.
5 Questions to Ask Before Automating your B2B Payments
1. What’s most important to my automation efforts? Cash back from spend? Greater efficiencies for AP team? A turnkey program?
Whichever benefit you’re seeking, there’s one thing to keep in mind: supplier network. If you are giving up checks in favor of electronic methods, your suppliers have to be on board. They have to be able to accept the electronic method that you use to pay them. For example:
- Should your payments provider use ACH (an electronic transfer of funds from one bank to another), suppliers will need to provide their bank account details. So, whomever you choose needs to be a trusted partner who can keep those details safe.
- Should your payments provider use virtual card (which generates rebates based on spend), the supplier has to accept the virtual card as a payment method. So, you’ll need a payments provider that has a large network of suppliers that 1) already accepts the card and 2) can get any remaining suppliers on board quickly.
That’s where specialty players (like Nexus) come in to play. If your B2B payments provider has a broad range of suppliers in network who accept card, but those suppliers aren’t your suppliers, don’t count on giving up checks soon or getting much cash back from your spend. Because you’ll need a sizable “onboarding” effort to get your suppliers to switch.
And who’s going to do it – you or the payments provider? Make sure you know that up front.
2. How much visibility do my auditors and company stakeholders require? Will they want to see the original invoice? Do they need to see approval history? What other visibility requirements are there?
Some companies and banks can technically pay your suppliers efficiently (after they get your suppliers on board with electronic payments – or you do the legwork for them). However, there are big gaps in visibility. For example, as you are approving payments, or checking historical payments, you can’t see the original invoice or every approver who OK’d them. You just know that the supplier’s payment was issued, and maybe its status.
If invoice and approvals visibility is important to you, don’t settle for limited insight into where things stand.
3. What visibility into digital B2B payments – and their details – will my suppliers have?
One of the top benefits of electronic payments is to reduce calls from suppliers asking, “Where is my payment?” Thus, if this is important to you, the payments provider should have a self-service portal where vendors can check all their payments – should they receive them via virtual card, ACH, check, etc. This portal should give them visibility into:
- Payment status for all their transactions
- Unprocessed virtual cards
- Processed virtual cards
- Refunded virtual cards
- Banks into which any ACH transactions have been deposited