B2B Payment Automation: 10 Pros & Cons You Should Know About

B2B Payment Automation

B2B payment automation is quickly becoming the future of AP processing for B2B companies. More and more businesses are adopting B2B payment automation solutions as these services become increasingly available and cheaper to implement. If you’re transitioning to an automated AP solution, keep in mind that, as with all software, there are both benefits and drawbacks. Here are a few to be aware of.

Limitations of Automated B2B Payment Processing

B2B payment processing does have some occasional downsides in some cases, but that doesn’t mean you shouldn’t implement it. In fact, fully understanding these limitations will help you to assess vendors properly and successfully transition to automated B2B payments.

1. Incompatibility Due to the Variety of Services Available

The volume and variety of options can be overwhelming, but only some B2B payment solutions will be compatible with your business and its needs. Some might not integrate with your accounting system, creating inefficiencies and inconsistent reporting.

Maybe some of your suppliers still prefer a paper check; does your chosen automation solution offer B2B check payments, or will you need to make alternative arrangements? Other suppliers might not want to use a B2B mobile payment solution, and you’ll have to find ways to accommodate them. Make sure the solution you choose is fully compatible with all your systems and suppliers.

2. Lack of Transparency

Not all B2B payment services will provide the kind of reporting or in-depth payment tracking you need, especially when it comes to cross-border payments. Suppose you need to pay an international supplier or write a paper check that isn’t processed through your automation tool. In that case, you may not be able to track the money flow appropriately.

3. Security Concerns

As we all know by now, security breaches are among the most significant risks that businesses face, costing companies billions of dollars every year. When you control your data, you have more control over its security—including B2B payment security. But when you use a third-party service provider, that control is transferred to them. Before involving a third party, you should look into their security measures and protocols to ensure your data will be protected.

Noteworthy Benefits of B2B Payment Automation

B2B payment automation offers significant benefits that can save your company both time and money in the long run.

1. Results in Significant Cost Savings

Automating your B2B payments can save you a significant amount of money. Goldman Sachs estimates that businesses that switch to automation can save up to 75% over traditional processes. When you use automation tools to pay vendors, you avoid the costs of printing and mailing paper checks, late fees, and duplicate or fraudulent payments. Plus, the faster processing time will allow you to take advantage of early payment discounts and save on overhead costs.

2. Saves Time Through Faster Payment Processing

Automation allows you to process payments faster, saving time for your AP team. Manual data entry is eliminated, and the two- or three-way matching process is completed automatically. You can use automated, customizable workflows to remove or eliminate bottlenecks, like routing invoices for approvals.

The most important time-saving aspect is the actual payment delivery time itself. A physical check takes between 3 and 5 days to settle, while a credit card payment or ACH transfer cuts that time by at least half. This is especially helpful with cross-border invoicing. Automation tools are the way to go if you need a fast, low-cost B2B international payment solution.

3. Increases Employee Productivity

Employees are more productive when they have automation tools at their disposal. If the AP team isn’t occupied with manually entering invoices or printing and mailing checks, they’ll have time to focus on value-added tasks. Automating B2B payments allows the AP department to spend more time improving supplier relationships, optimizing payment timing, and producing valuable reports for decision-makers.

4. Enhances Insights via Data Analytics

B2B payment automation tools include advanced data analytics. These tools can provide insights into the costs of processing and paying invoices, or the dollar value of early payment discounts. Many even have AI tools that analyze past payment patterns to forecast future cash flow needs. Enhanced insights like these can help you plan for the future and achieve growth.

5. Aids in Fraud Prevention

Implementing AP automation can prevent fraudulent payments by connecting directly with suppliers to gather payment details (like bank account numbers) or offering virtual and single-use cards. Automated tools also alert you to duplicate invoices or those without a matching purchase order, so you can catch a fraudulent payment before it’s disbursed.

6. Strengthens Vendor Relationships

Maintaining solid relationships with vendors is a critical—and often overlooked—aspect of running a successful business. Strong supplier relationships can result in better discounts and improved internal operations. AP automation tools can help you track payments and ensure you always make them on time, fostering trust and loyalty with your vendors.

7. Puts Exceptional Customer Service at Your Fingertips

Some hiccups are bound to happen when implementing or using third-party B2B payment automation solutions. Whether you’re having trouble onboarding suppliers or simply need tech support, the SaaS provider will have customer service available whenever you need it. Most allow you to contact support via email, live chat, or phone. They also offer extensive online resources and troubleshooting guides.

B2B Payment Automation for the Win

The benefits of B2B payment automation aren’t limited to those outlined above. You’ll also have better visibility and control over where your money is going, fewer invoice and payment errors, and more opportunities to get discounts. B2B payment solutions can help you capitalize on these advantages, helping your company save costs while reducing cumbersome manual work for your finance team.

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