5 Reasons Companies Need B2B Payment Strategies
According to Alan Safahi’s research, consumers spend more with cashless or contactless payment options in 2021. Alan Safahi is a leading entrepreneur, advisor, and founder of a San Francisco-based Start-up Company who has done tremendous research on B2B payment strategies for businesses. Safahi says there was over $4.1 trillion in digital transactions in 2019.
Digital payment methods, including the incorporation of B2B strategies, have accelerated during the Covid-19 pandemic. Alan Safahi Orinda’s research shows that virtual card spend will grow to $355 billion in 2021 and 2022, which was $136 billion in 2017. In 2013, the gross merchandise volume (GMV) of B2B payments was $5.83 trillion.
However, it reached $12.2 trillion in 2019. Over 1.31 billion people will use mobile payment applications by 2023. These stats show the significance of B2B payment strategies for businesses. In today’s article, we will mention five reasons companies need B2B payment strategies. Read on!
1. Improved Cash Flow:
B2B payment strategies offer an integrated automated virtual solution to improve your company’s cash flow. With B2B payments, you can cut your payment cycle by 50%. For instance, you will receive a clear statement and bill after every transaction.
When you pay your suppliers on time, you can take advantage of a longer payment period and increase your profit. Therefore, B2B payments offer improved cash flow and a free credit line than standard bank transfers.
2. Automation and Ease:
According to Alan Safahi Orinda, manual work leads to increased stress, making it challenging for companies to run multiple processes for paperwork and checks. On the other hand, B2B payments decrease the number of vendors significantly while allowing you to run multiple processes for paperwork and checks smoothly.
Not only do B2B payments save your accounting department a lot of time, but they also enable your employees to spend more time on strategic and value-added initiatives to streamline and grow your business. Because all expenses are typically settled centrally, a B2B payment strategy eliminates error-prone individual settlements.
3. Better Control:
A B2B payment strategy, such as virtual cards, allows for easy, simple, fast, and reliable online card generation. You can lodge these cards with your suppliers to settle all expenses centrally with a streamlined summary in one single statement.
That way, you can see a bigger and detailed picture through proper analytics and back-end reporting. Safahi says better financial control is directly proportional to streamlined business operations, leading to business growth and increased ROIs.
4. Better Rates Negotiation:
A B2B payment strategy enables you to engage with your business suppliers and negotiate better rates. When you analyze the bigger picture, patterns, and data, you can deal with your suppliers in a better way. Bear in mind that you must incorporate a suitable B2B strategy that aligns with your business.
For example, a B2B strategy is essential for the procurement department. According to Alan Safahi, if a business wants to generate maximum value, it must focus on a mutually beneficial value proposition. If you are a buyer, you will see a reduction in days payable outstanding (DPO), meaning you will pay earlier to get better supply rates.
5. Secure Transactions:
B2B payment solutions lead to secure transactions and reduce fraudulent activities. Safahi says digital B2B payment strategies make it faster to issue, process, and receive payment, leading to secure business cash flow.
The latest technology innovations will make B2B payments safer, smarter, and more secure, leading to seamless and efficient payment processing. Safahi’s research shows that artificial intelligence (AI) will play a crucial role in address frauds worldwide in the near future, making B2B payments more secure.
Alan Safahi advises companies to incorporate B2B payment strategies to achieve convenience and accessibility. You can self-service and pay invoices at any time with digital payments. Lastly, digital transactions are safer and more secure than traditional methods because they have secure gateways and streamlined processes, making it challenging for hackers and criminals to breach.