Why Suppliers Increasingly Get Paid through B2B Payment Networks

Business-to-business payment networks have considerable value for businesses making supplier payments. Payers are moving to these networks for their rebate potential, reductions in accounts payable processing costs and time, and significant fraud prevention capabilities.

Suppliers are also increasingly adopting these networks to hasten the shift away from check payments and supercharge visibility, time-and-cost reductions, and payment protection. While 35% of vendors say they’re still using fully manual AR processes, most are eager to shift away from the old way of doing things.

Here, we’ll summarize why vendors are moving to accept payments through B2B payments networks and why payers are encouraging enrollment.

What is a B2B Payments Network?

These networks are secure, two-sided digital platforms that enable payers and suppliers to exchange invoices, payments, and remittance data in a single place, improving speed, visibility, and fraud protection.

To learn how these networks work, please read our Learning Center article about B2B payments networks.

Taking Action Because of Challenges with Check Payments

Suppliers have traditionally been reluctant to move away from check payments because  they’re familiar and already built into their accounts receivable processes. While they’ve been a staple, checks now come with ever-increasing delays, manual efforts, and fraud risks for vendors.

Delivery through the mail has slowed. Checks are often stolen from the mail and used to create fraudulent businesses that then steal the payments. Manual reconciliation and posting make for sluggish cash application and limited visibility. These problems add up to create major delays and fraud risk.

Suppliers moving away from checks are responding to slowdown and security concerns, but they’re not just adopting new payment methods. They’re looking for enhancements to AR workflows, visibility, and fraud prevention that receiving ACH or card alone can’t accomplish.

Faster Access to Funds and Reduced DSO for AR Teams

One of the primary drivers for supplier adoption of B2B Payments networks is speed. Payments made through B2B networks typically reach suppliers faster than paper checks and arrive with improved remittance data, reducing days sales outstanding (DSO) and improving cash flow.

Electronic payments also eliminate the lag between receiving a check and depositing it, as well as the additional time spent resolving exceptions. For suppliers managing tight margins or high transaction volumes, faster access to funds can have a meaningful impact on working capital and even business survivability for smaller companies.

The difference between receiving and automatically posting a payment in 1–2 days versus waiting a week and reconciling manually can materially affect cash flow, especially for smaller businesses.

Greater Visibility into Invoice and Payment Statuses

Transparency is a must for vendors, but difficult to achieve when they’re working with paper or email invoices and paper payments. They can’t check their email and see if an invoice has been opened or actioned, and they certainly can’t see how a check is winding its way through the mail. That problem is compounded when remittance details arrive separately from the actual payment.

Payment networks centralize invoice, payment, and remittance data and make it possible to keep tabs on that critical information online. That means being able to see when invoices are opened, actioned, and approved, when payments will arrive, and what remittance details will arrive with them. That visibility reduces uncertainty, shortens reconciliation and invoice to cash cycles, and ensures vendors don’t have to constantly pester customers to get updates.

Lower Processing Costs and Less Manual Effort

Processing paper checks drains both time and resources from businesses, and even accepting electronic payments can do so if remittance detail is limited and processes are bumpy.

When process flows are largely automated, as they are through B2B payments networks, cumbersome steps are reduced or eliminated outright. Matching is streamlined, follow-up is reduced thanks AI-aided dunning and invoice presentment, and reporting becomes straightforward and digestible.

Over time, these efficiencies free teams to focus on higher-value activities like further improving collections strategies, forecasting, and negotiating more favorable terms with customers.

Improved Security and Fraud Protection for Supplier Payments

The reputational costs of vendor fraud can be massive and business-ruining. That’s true when vendors deliberately defraud their customers, but it’s also true when vendors are compromised by bad actors and payments are misdirected to fraudulent bank accounts. In either case, customers may find it hard to trust the vendor, splashy headlines can damage reputations, and the money a supplier is owed may be slow to arrive.

While check payments make up nearly 70% of fraud losses in the US, ACH is still quite vulnerable to fraud...unless it’s delivered through a secure B2B payments network. Rigorous, layered prevention driven by AI and human expertise that includes multi-factor authentication, account validation, and constant monitoring can keep supplier accounts safe and protect customer payments. This in turn prevents financial and reputational damage for both parties that has become such a concern for businesses in recent years.

Delivering a Better Experience for Customers, Too

As more buyers adopt B2B payments networks, suppliers are increasingly encouraged—and sometimes required—to enroll. From a supplier’s perspective, participation often leads to fewer payment follow-ups, faster resolution of disputes, and stronger relationships with customers, as well as the security, efficiency, and cost-savings benefits outlined above.

For payers, supplier participation enables cleaner process flows and payment data, a smoother end-to-end AP process, and enhanced fraud prevention and automation capabilities. These payers no longer want to make check payments and do not want to force their vendors to adopt electronic solutions without compelling reasons. Vendors that agree to receive payments through B2B payments networks like Paymode realize additional value, allowing both parties in the transaction to gain more than just a safe and fast way to manage payments.

Why Adoption Continues to Grow

The shift toward B2B payments networks reflects broader trends in digital finance, with businesses moving to ramp up automation, transparency, and risk reduction. Suppliers that adopt these networks position themselves to receive payments faster, operate more efficiently, and reduce friction with their customers while gaining the benefits of AI and improving technology without significant infrastructure investments.

In summary, suppliers join these B2B payments networks for:

• Faster access to funds and lower DSO
• Automated reconciliation and reduced manual effort
• Real-time visibility into invoice and payment status
• Stronger fraud prevention than checks or standalone ACH
• Better customer experience and fewer payment follow-ups

Even five years ago, the answer to “why would suppliers use a B2B payments network?” had a muddy answer. As fraud risks grow, efficiency becomes a must, and checks and manual processes die out, the value of making the shift is now crystal clear. Joining a network today is less about accommodating payer desires than taking the opportunity to improve AR outcomes throughout the invoice-to-cash process.

Learn more about B2B Payments Networks