An AP Team’s Guide to B2B Electronic Payments
This is the year. The year when your AP team is going to finally ditch checks and embrace a digital payment solution to pay all the vendors who keep your company’s apartments, retail properties, office buildings, and storage units running.
But while everyone on your team uses online bill pay for their personal finances, they’re not sure what to expect from a B2B electronic payments solution for their business invoices.
- Does it work differently from their online bill pay?
- Will it allow them to see what’s been paid and when?
- Can they cancel payments and modify them?
Here are 10 other things an AP Team might want to know when evaluating B2B Online Payments Solutions:
1. How does a B2B electronic payments solution differ from online bill pay?
Personal Online Bill Pay
B2B Online Payments Solution
# of Banks Paying Invoices/Bills
# of Invoices
|10-30 per month
|100+ per month
# of Payment Approvers
|Multiple (Controller, CFO)
Audit Trail Required
Differences Between Online Bill Pay and B2B Electronic Payments
While B2B online payments solutions vary, most offer a lot of the same functionality - and control - as online bill pay. Users can pay their invoices electronically, and see who got paid online, and when. They can also view historical payments.
But that’s where most similarities end. B2B electronic payment software, like Nexus, is equipped to pay hundreds of invoices per month, not just a handful. Digital payment platforms also provide an easy-to-use interface that lets users seamlessly track invoice payments, approve them (often including multiple levels of approval, such as from the CFO), and pay them with clicks.
The funds for these invoices are not paid from one or two banks, like personal payments. Instead, they are paid from multiple bank accounts (i.e. 20+ banks). So, the digital payment solution must be able to sync up with these banks to pull the money electronically. And it has to be able to handle any changes in banking relationships.
The B2B online payments solution also provides a comprehensive audit trail. It shows who approved each payment, what payment methods were used, and when funds were dispersed. And many solutions, including Nexus, can also pop up the invoice that corresponds to the payment.
2. Do B2B electronic payment solutions offer multiple payment options?
A B2B online payments solution provider should offer a few different payment methods that address the cash flow and security needs of both the buyers (AP Team) and the suppliers (AR team). Two common electronic payment methods are:
ACH – the B2B electronic payment solutions provider facilitates the transfer of funds electronically from the buyer’s bank to the supplier’s bank. Often these transfers happen in a few days. They carry some risk but are considered more secure than checks.
Virtual Card - the B2B online payment solutions provider debits the money from the buyer’s account and then issues a branded virtual credit card to the supplier. The card, often backed by Visa or Mastercard, is sent via email to the supplier for a specific invoice (or invoices). The supplier can then process the card on their Point-of-Sale (POS) system, just like any other credit card. These cards are often sent faster than ACH transactions and are considered more secure.
In many cases, smaller suppliers, like landscapers, law firms, handymen, and others don’t have POS systems. So, some B2B electronic payments companies, like Nexus, offer a solution where a virtual card is issued to the supplier, but the card is processed on their behalf without the supplier needing to run the card through their system. Read more on this payment alternative: If you Think SMBs Can’t Accept Virtual Cards, Think Again.
3. Does our AP Team have to onboard suppliers to new payment methods?
It depends. Some B2B online payment solutions don’t have an onboarding team that reaches out to suppliers and advises them about the benefits of electronic payments (ease of use, speed, traceability, and security – to name just a few).
Others, like Nexus, have a professional team of representatives who will contact the suppliers and encourage them to switch to electronic payment methods. This outreach team advises suppliers about the different electronic payment options and does the legwork of switching the supplier to their preferred payment method.
4. How receptive will our suppliers be to new electronic payment methods like Virtual Card?
While it’s good to have a supplier services team that can switch suppliers to digital payments, it’s even better when a large chunk of the supplier community already trusts and accepts the branded payment card, like Nexus Virtual Card. That way, there’s less ramp-up time needed because it’s already the “default” payment method for many of the suppliers with whom the buyers work.
Thanks to Nexus’s 20+ years working within the real estate industry, many suppliers who service the vertical – like plumbers, mechanics, HVAC, pest control, and others - already take Nexus Virtual Card from any buyer who offers it.
Thus, it’s often best to use a B2B electronic payments company that specializes in a specific business segment and already has brought on suppliers associated with it.
And to be sure, B2B online payments companies will let you know which suppliers have accepted which payment method. Read more about the Nexus Supplier Network.
5. Do digital payment solutions provide a way for buyers/suppliers to stay in-the-know about payments 24/7?
Almost all B2B electronic solutions providers offer data at your fingertips, but how often it’s updated, and the depth of the data varies.
Your AP team should be able to log in anytime and view which payments have been sent, which have been processed, and all the relevant dates associated with both. In addition, they’ll want to see which banks issued the payments, which payment methods were used, and the invoices tied to the payment. They should also be able to see who approved the payments and when they were approved.
Suppliers, meanwhile, should be able to login 24/7 to check on payment status, payment amount, payment timing, and a host of other data.
This shared view of real-time data can allow you to eliminate all the back-and-forth. The NexusConnect self-service portal, for example, has been shown to reduce the time spent communicating with suppliers by 75%. Portals like NexusConnect even allow suppliers to submit invoices directly to your AP team, so there’s additional incentive for suppliers to use them.
6. Do B2B electronic payments solutions allow us to retain control over our outgoing bank accounts?
It’s common for consumers to be able to toggle between different preferred payment methods when paying online (thanks, digital wallet technology!). But how does a business set up and manage their payments when they have hundreds of bank accounts?
Leading B2B online payments providers let users set up and change all their outgoing bank accounts themselves – right in their self-service portals. Users simply add their business bank account information, wait for the account details to be automatically validated and confirmed, and then link the bank account to the locations that can issue payments from it.
Only a few providers, like Nexus, let AP teams self-manage their bank accounts for no additional fee.
7. Can B2B online payments solutions provide vendors/suppliers with full remittance information?
When you issue payment with an electronic Virtual Card, it isn’t as if you can attach the corresponding invoice details for the supplier. Or can you? Turns out B2B electronic payments can provide all the remittance details suppliers need directly within an email and/or within their self-service portals. The supplier isn’t going to need to call you for payment date, invoice date, invoice number, and invoice amount, etc.– they can access this information via their inbox or with just a few clicks online.
8. Can our AP Team approve payments online?
While B2B online payments automation companies vary, most let reviewers log online and approve the payments assigned to them. These approvers (which can include employees like the controller or CFO) are alerted by email when a payment file – containing individual transactions - is ready for action. And they can simply log in to authorize payment disbursement.
When that long-time CFO leaves the company for a comfy retirement, don’t worry. B2B electronic payments solutions allow for changes in approval hierarchies. Some make it easier than others, though.
9. Can common exceptions be resolved online?
Being able to resolve problems or exceptions online is important for AP teams everywhere. So, it’s critical that AP teams understand what common issues can be resolved online – and which have to be relegated to a call center.
For example, what happens when a supplier wants to refund a virtual card payment because there’s a credit on file?
Some companies, like Nexus, let you resolve many exceptions online, including refund issues.
Before taking the plunge into a B2B online payments solution, it’s a good idea to ask whether the B2B electronic payment company has a sizable call center. If it does, it may be a “tell” that there’s not a lot of self-service opportunities online.
10. Do B2B electronic payments solutions connect directly to our AP invoice automation platform?
Most B2B electronic payment solutions can work with your invoice automation software. Some have both the payments and the invoice software integrated into the same platform for greater ease of use.
This allows AP teams to track an invoice online through all the steps – from invoice ingestion, to coding, to approval(s), to payment. It also lets them see where things get held up in the process, pull reports, set up a broad range of workflows, and track just about everything.
When selecting a B2B online payments platform, it’s important to know what you’re getting. After all, there are few things as important as paying your suppliers – and doing so quickly, reliably, and securely. It’s a good idea to have these questions teed up to help in your search for a B2B electronic payments company.