Anyone who owns their own business knows how important business-to-business relationships
and transactions are. In many ways, these inter-business connections are more important than
interactions with retail customers. The business-to-business or B2B flow of goods and services
is an integral part of the worldwide economy. In fact, in the United States alone, the B2B
the payments industry is worth a whopping $18.5 trillion per year.
While that stat is impressive, the mind-blowing part is that the majority of businesses still make
their business-to-business payments via paper check. The latest data available states that 51
percent of all businesses still make their payments this way. While that is down from over 80
percent in 2004, it is still pretty staggering that the majority of businesses in North America
choose this method so far into the 21st century.
B2B payment processing has come a long way. There are more methods available and most
importantly, businesses trust those methods. It seems, however, by a slim majority, business
owners are still holding out. They’ve all got their reasons and some of them are legitimate, but
one has to think some are just being stubborn. Plenty of business owners have embraced online
B2B payments. Here are four reasons why the remaining 51 percent should follow suit:
- Improved cash flow. There’s no doubt that online payment services and apps are much
faster than paper checks. Cutting out the lag time between writing a check, mailing a
check, and waiting for that check to clear at a bank gets money moving faster.
Businesses can also use the software to keep tabs on who might be paying late and
could allow for customers to pay you directly as well. This will increase your company’s
- Security. Ironically, this is one of the main reasons business operators hold on so tight to those paper checks. The reality is that online B2B payment processing is much safer than sending potentially dozens of paper checks out into the world every month. Sure, there are instances of hacking and malware attacks but, they are minuscule in terms of the number of mail thefts and lost checks.
- Simplified bookkeeping. No one wants to do their taxes or worry about keeping their
accounts separated. These B2B software systems make it infinitely easier for business
operators to keep all their money straight. Handling paper checks that are coming and
going from different parties can be confusing and potentially dangerous for your bottom
line. Business-to-business payment processing software keeps all this action on one
platform so you can keep a constant eye on it.
- Efficiency. This is the main reason to automate any system; to save you and your
company time and money. This article already mentioned the speed at which these
payments are processed, but you should also factor in the time you’ll save by not having
to chase down late payments. Also, studies have shown that when you incorporate
personnel costs, processing a paper check cost about two dollars per check. This means
not only are you losing time by processing paper checks, but you are also paying for the
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