When many people think about the last time that they wrote out a check, they can hardly remember when it was. So, it seems surprising that more than half of all business to business payments in the United States are made using checks. These days, consumers prefer online methods, and this is born out of the transactions they make across most other sectors. So, why are B2B payment processing methods stuck in the past?
More than $18 Trillion In B2B Payments Every Year
When looking at the different types of financial transactions taking place in the U.S. every year, it is clear that by far the largest proportion is in business to business payments. More than $18 trillion is paid out annually. This is around 25 times more than the number of person to person payments. This explains why adopting innovation when it comes to B2B payments has proven to be a lot more problematic.
Bank of America has reported that a single business check can cost a business an aggregate of up to $20 depending on the check’s amount, any shipping charges, as well as the other administrative tasks involved in its handling. It has been estimated that dealing with paper checks costs American businesses as much as $50 billion in just a single year, and, yet, they continue to use them. Why?
Why the Reluctance to Accept Technology?
One of the reasons why businesses are so reluctant to accept the latest electronic technology is because checks leave an audit trail that is easily verifiable without needing to set up a new system or put a new process in place. Sometimes, checks seem preferable since they come with a remittance advice, while many companies find that they have only partially automated their processes and, therefore, the flexibility that writing checks offers gives them better control when it comes to cash flow.
What Is the Solution?
Although we see why so many companies are still so eager to write out checks for business to business transactions, it isn’t a sustainable path for the future. As every element of daily life moves online, switching to electronic payments is the inevitable conclusion for all businesses. Therefore, choosing a provider that can offer a comprehensive and reliable platform that is fit for the business world of the 21st century is essential.
Finding an affordable solution is also paramount. One of the things that deters businesses, especially smaller ones, from adopting an electronic solution is the fear that they will not be getting value for money and they worry that they will have to spend large amounts on software in order to be able to process invoices electronically.. However, there are affordable and advanced solutions that can provide the ideal answer to the problem and that can seamlessly integrate into existing systems to allow for a more streamlined and cost-effective solution, when compared to the old school process of mailing invoices and processing paper checks.
BillingTree’s business to business payment processing solution has been designed with the needs of companies of all sizes in mind. As an adaptable, future-proofed scalable solution, it offers complete flexibility to accept payments via a number of different methods, from credit and debit cards to ACH payments, for the greatest convenience and maximum cash flow.
BillingTree’s business to business payment processing solutions are also fully compliant in order for companies to meet their obligations, and are available through an online portal or via an automated phone system (IVR) that enables payments to be made through the payer’s preferred channel and at a time to suit their own needs. This makes it easier for companies to receive payment in a timely manner, shortening their payment cycle and maximizing revenue in today’s tough financial climate.