Simplifying AP is vital; a key step is choosing a B2B payment vendor. Review the top considerations to find the right fit for your organization.
Traditionally, the Accounts Payable (AP) process has been cumbersome and time-consuming. One overlooked aspect of streamlining financial operations is selecting a vendor for B2B payments. Getting this right for your organization is incredibly important so it’s critical to consider specific parameters to meet your needs.
For example, PYMNTS research indicates that adopting automated solutions can enable firms to reduce their wasted spend by around 11%. This represents 4.1% to 4.4% of total expenses, based on the underlying errors.
Given the potential impact on your bottom line, here are some of the key considerations to keep in mind to get the efficiency, security, and control that you’re looking for.
- Payment Options and Flexibility: What types of payment and terms does the provider offer? Make sure they support a wide range of payment methods, including electronic payments such as ACH transfers, wire transfers, virtual cards, or e-wallets. And ask how they handle currencies and conversion for international transactions.
- Vendor Network & Relationship Management: Understand the scale of their vendor network and how they manage those relationships. For example, does the solution provide services around onboarding vendors for payments, own the vendor payment inquiries, manage the personal payment information of the vendor, and actively campaign to get vendors on more secure electronic payment methods?
- Security and Compliance: Protecting your company from fraud is of the uppermost importance. In 2021, an alarming 98% of B2B businesses experienced fraudulent attacks, resulting in an average loss of 3.5% of their annual sales revenues. Look into the provider's security measures, including payment fraud protection, data encryption, secure authentication protocols, and compliance with industry standards and regulations such as PCI DSS and GDPR.
- Integration and Scalability: How does the provider integrate with your existing systems such as accounting software or ERP? Are there APIs or connectors to facilitate data transfers and/or automation? Also, assess their scalability to accommodate your business's growth and evolving needs, such as their ability to adapt to increasing transaction volumes.
- Customer Support and Service Level Agreement (SLA): Do they have a dedicated support team to promptly address any issues or concerns? Examine their service level agreement (SLA) that outlines response times, uptime guarantees, and issue resolution protocols. A reliable support system ensures smooth operations and minimizes disruptions in payment processing.
- Pricing Models and Cost Analysis: Dig into the provider’s pricing model to understand how it aligns with your budget and expected transaction volumes. Double-check to see if there are any hidden fees or additional charges. Look at the overall expected return on investment (ROI) by conducting a cost analysis, taking into account the provider's fees and estimated cost savings through improved efficiency.
Operational inefficiencies hurt the bottom line
Simplifying your payment process with the right payment provider can make a material difference to your financial operations. While making the decision to work with a payment provider, be sure to consider variables such as payment options, flexibility, security measures, integration capabilities, scalability, customer support, and pricing models. This will empower you to make a knowledgeable decision that enhances your organizational effectiveness, safety, and governance.