Challenges & Solutions of Small Business B2B Payment Processes

Challenges & Solutions of Small Business B2B Payment Processes

I’m pretty sure that any businessman hardly gives a thought about how he’s making payments or receiving one. In this post, we’ll be speaking about business-to-business payment process and that do not involve customers/clients.

You sell or give services to customers then it’s B2C. Suppose, you are dealing with another business person, who does not belong to the regular targeted customer group, then it’s B2B. You sell or get raw materials from other small businesses and there are money transactions then it comes under the B2B payment system.

Many small business owners are hardly concerned or bothered about their B2B payments model. They do not realize that their business cash is somewhere connected with this system.

The B2B model is completely different from B2C model. Here a business person becomes the client/vendor to another business person. If the payment model that is chosen is a good one, then the business person will face no delay and nor he’ll be paying anything extra.

But in reality, everything is conflicting.

To understand that better, go through some of the common challenges faced by small business owners in their payment system.

Why is B2B Payment Process Problematic?

You are just making or taking payments, then what would issue could you face?

It’s all about time, convenience, payment cost, and most importantly the security. Basically, there are different ways to make the payments.

1. Cash

Today, not everyone would have time to deal with this conventional payment practice.

I understand you don’t want any forms of delay, but will any business organization just hire a resource to deal with this? Upon receiving the cash, the receiver should carry cash all the way along and deposit in his account. But how safe is that? Or convenient do you find this option to be?

Does your business client spend money on bookkeeping resource?

No, definitely not.

Also, in this day and age, payment through cash is definitely not advisable if a large amount is involved.

 2. Check

Check payment is definitely the best option over direct cash process, but it is not the ultimate solution.

As similar to cash, you can easily lose a check and anyone can misuse it. In addition to that, there will be bank fees and if the check gets bounced, even that costs you money.

Again, if it’s a post-dated check, then you need to wait again.

3.Credit Card

If you are using a business credit card for making business payments, then you’ll save a lot of your business time and experience no delay in giving or getting cash.

But the major disadvantage is you have to pay high transaction fees. Larger the amount you are dealing with higher will be the cost. Apart from that, you have to pay annual fees, late fees and these things will be burdensome if you are running your business on a watertight budget.

4. ACH

Automated clearing house abbreviated as ACH is a network, where the funds are transferred electronically. The disadvantages of using this payment method are you have to pay set-up cost and there will be deductions for each transaction.

You can do real-time transactions, but this payment system can be an easy target for fraud activities.

All the payment system has one or the other drawbacks. For small business owners ‘money is the king’ or ‘cash is the king’. So, if they need to run an efficient business, then they should choose a payment model that is safe, reliable, and inexpensive.

Which is the Best Model for Making B2B Payments?

A business prepaid card.

Recently, Allied Market Research published a report that forecasted that by 2022; the prepaid card market would reach $3,653 billion globally.

More business persons and organizations are switching to this new financial model due to various reasons. The main features of a business prepaid card that are managing to attract more eyeballs are the convenience and inexpensiveness.

There are no transaction fees and nor any payment associated to be part of the program. In addition to that, a business prepaid card is more secure and you can monitor your B2B payment process in real-time, anytime, anywhere.

Also, it’s a very great advantage if your B2B partner is using the same payment model. You can direct deposit and avoid any risk of losing cash.


The Bottom Line

Switch to a business prepaid card today and enjoy the convenience of running a better and efficient business.

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