B2B transactions are often associated with a more red tape than the average B2C sale. Unlike a single consumer making a purchase, a B2B transaction requires multiple decision makers, corporate funds versus a personal bank account, clunky expense reports and much more. However, the exchange of money is what keeps businesses afloat, so it's crucial that merchants make this process as seamless as possible for their customers.
No where is this problem more evident than in the $1 trillion B2B eCommerce industry. Here are three common snags that slow down B2B transactions and how to mitigate them:
Multiple decision makes can create delays
A payment or purchase often requires approval from two or more department in a business. Whether a VP, a department chair, the accountant or even the CEO, sign-off from several individuals can create friction and delays, especially if one party is out of the country on vacation or simply preoccupied with other business priorities.
A delayed sales process can be risky for the business making the sale and even cause the sale to fall through. It's important to plan ahead and recognize that several stakeholders will be involved in most business transactions.
"Delayed sales can lead to lost sales, which mean lost revenue. Evaluating the entire process and identifying kinks is the first step to streamlining an ecommerce business," says Michael Noble, CEO of Apruve,a B2B ecommerce payment platform.
Beware of the waiting game
Certain processes, like net 30 billing periods, are business policies that can't be altered. A net 30 policy implies that a business will make a payment within 30 days. Add this on to the back and forth of invoices, purchase orders and collection, and net 30 can lead to a lot of extra work just to make sure your customer actually pays on time. So how could this process get better?
Tying purchase orders and payment terms directly into an eCommerce transaction is one way to make this process paperless and more efficient. For example, Apruve helps merchants give their customers purchasing terms as well as automating payment when it comes due.
"It's all about reducing traditional accounts receivable headaches," says Noble. "eCommerce is all about driving process efficiency. The process a merchant used offline to take orders and gets paid needs to translate into the online world.
Be understanding when it comes to different payment forms
Arguably, the only entities writing checks are the sweet grandmother holding up the line in the grocery store and businesses. In the B2B world, however, checks remain a common method of payment. Six billion B2B checks were written in 2012, and each check costs a business an average of $4 to $20 to produce, along with the cost of paper, printing, postage and an unreliable mail system. That's an awful lot of money spent on checks each year.
Checks may have their place for certain businesses, especially since many B2B businesses can't use credit cards for transactions like a consumer would. Still, a digital alternative is often faster and more reliable. With services like PayPal or Apruve, there's no way for payments to get lost in the mail and no need to deal with excessive printing and processing.
In an ecommerce era, technology has shifted the ways B2B business is conducted and norm for payment processing. However, while certain norms remain--like writing and processing hard checks--peripheral technology platforms like Apruve have been created so customers can pay in the way most convenient to their needs. Apruve, for example, allows businesses to pay an invoice via credit card, eCheck or a traditional paper check with a nominal transaction fee.
"In business, the customers' needs are paramount. Some business practices, like check writing, seem antiquated but make sense from a business perspective and are here to stay. New technology can help facilitate those processes for merchants, while still keeping customers happy. And that's a good thing for everyone," says Noble.