Why integrated payment systems are a must-have for every business

To create efficiency in B2B transactions, a buyer’s accounts payable and the seller’s accounts receivable teams should connect to ensure invoices are issued properly, and payment times and amounts are correctly adhered to. Yet syncing these processes may seem like an unrealistic task, especially if both businesses work across multiple disparate systems that don’t talk to one another.

However, smart technology is now making the ability for both parties in a transaction to seamlessly sync their financial ledgers which delivers better transparency, collaboration, payment practices and improves cash flow efficiency for both parties.

What are the two sides of the cash flow equation?

In B2B transactions, the two sides of the cash flow equation are supplier and buyer. Depending on the payment terms and options you provide as a supplier, you may get paid as soon as a customer places an order. 

However, if your accounts receivable systems and processes are structured like most that provide extended terms of trade, trade credit and process payments using bank transfers, your business has likely fallen victim to late or incorrect invoice payments. This results in wasted time and resources chasing the outstanding payments, and of course, weakens your business’s cash flow.

The importance of integrated payments

Integrated payments help businesses to accept a range of payment options, facilitate faster payments, automate payment acceptance, and automatically record transactions in their relevant finance and accounting systems, in real-time. Automating and integrating business payment systems reduces the risk of human error and improves reconciliation and reporting accuracy. 

Businesses need this accuracy to meet their regular financial commitments, plan larger investments and be prepared to shift gears quickly if needed.

• Reduces friction between buyers and sellers
• Improves data quality and record-keeping
• Better data security for both parties
• Lower invoicing costs
• Increases cash flow

As a payments portal that sits on top of a business’s regular accounting software, integrated payment solutions provide the functionality for suppliers to enable and customers to log in, view and pay invoices, all while linking everything back to their respective accounting software or ERP system.

This means that B2B payments are virtually self-serviced, requiring little involvement from the invoice sender. Most importantly, integrated payments provide greater payment flexibility for the customer which significantly improves the chances of the supplier being paid on time, while allowing the customer to align their payments with their cash flow.

How can suppliers get paid on time or early?

Suppliers can get paid early by providing customers with a range of payment options and access to integrated systems that make it easy for invoice payments to be made in a few easy clicks. These payment options might include extended credit terms or instalment payments, credit card payments or bank transfers.

An integrated payments system such as Spenda’s, can easily automate your online payment acceptance with a secure payment gateway and real-time account reconciliation. From here, the customer can schedule payments with a method that best suits them. You’ll know exactly when to expect payment and your customer will know exactly when payment will be deducted from their accounts.

How can buyers pay on time or early without sacrificing their cash flow? 

As outlined above, business customers can use an integrated payment system to pay their suppliers on time. For example, if your business only runs bank transfers on certain days, which could result in an invoice being paid late, opt to pay via credit card instead which will ensure the supplier gets paid on time while giving your business extra time to pay if you have interest-free days on your credit card. Alternatively, you can schedule payment via bank transfer on a set date.

For suppliers looking for other ways to provide payment options to customers and minimise non-payment risk at the same time, you can offer a Buyer Finance facility, where businesses like Spenda will act as a third party financial provider to assess and assume the financial risk with your buyer. This means your business gets paid on time while Spenda manages the payments with your customers, delivering better customer experiences and enabling smarter cash flow management for both parties.

Align your payments and cash flow with Spenda 

Spenda helps both parties in the transaction to better align their cash flows by improving how invoices are viewed and paid between businesses. Not only does this save you time on chasing late payments, but it gives you the ability to provide payment flexibility that suits both sides of the cash flow equation.

Keen to see Spenda in action? Book a free demo with our team today!

*This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.