With technology developments and new payment solutions, businesses are able to choose from a variety of methods to conduct transactions. The five main ways to receive and make B2B payments include checks, ACH transfers, credit cards, electronic funds transfers, and online payment platforms. While they all offer advantages, there are also disadvantages to each payment method that you will need to consider before you select which payment methods will work best for your company. To help you understand the pros and cons of each type of payment, we’ve put together a SlideShare presentation that breaks down each of the five main B2B payment types.
Types of B2B Payments
Checks are the first type of B2B payment. They are simple and relatively cheap with a long float. They do not have setup costs or a complex system to learn. However, they can be lost or stolen in transit and actually end up being pretty expensive. When used, your accounting process becomes quite laborious.
Credit cards are another B2B payment method. They make it easy to access credit and are convenient. They tend to be fairly secure, and if there is a dispute, then the credit card company will step in and help you. However, they can be an expensive payment method with numerous costs and fees attached to each transaction.
ACH is a third B2B payment option, and it offers the advantages of fast payments, no float, and the requirement that all funds must be in the account before a transaction can be completed. Disadvantages with ACH include complex set-up, numerous forms, hidden details, and the ease at which payments can be reversed, leaving you with losses.
Electronic funds transfer is the fourth B2B payment option. The funds are available almost immediately. It’s a simple process with no float and no real information requirements. The disadvantage is that you can only do these by phone. There is no remittance information and it can get expensive. Also, the changes can’t be reversed even if there is a dispute.
Lastly, the fifth payment method is online payments, which is an easy and convenient way to conduct transactions. It offers detailed remittance information for good record keeping. However, each online payments platform has different criteria, charges, and formatting for information, which makes it confusing to know which to use for your business.
To learn more about the various B2B payment options, be sure to view our SlideShare presentation on the various ways you can send and receive B2B payments.