Up until recently, the option to pay for goods and services has been cash, cheque, and credit card.
A long time ago, Suppliers who only accepted cash, had to adapt and offer new financial instruments such as cheques and credit cards. One obvious reason for Customers preferring new instruments was that they were easier to carry around than cash. To adapt, Suppliers had to offer cheque-validation processes as well as card-reader devices at the cash register.
Nowadays, the array of payment options is much wider, and Customer preferences keep changing. The necessity for Suppliers to adapt with them remains the same. For example, very few Suppliers would see a cheque payment today!
Three different words help explain why B2B Suppliers need to consider offering multiple payment options now: choice, convenience, and Procure-to-Pay.
Choice
Today’s business customers are more sophisticated with more information available than in previous times.
They have information at their fingertips and like having more choice when it comes to how they pay for their business purchases. Payment methods gaining in popularity include contactless credit/debit cards, mobile wallets, and online ‘Pay in Instalments’.
Businesses are increasingly familiar with these new services in their consumer life and for this reason see these methods as safe, and ideal for budget concerns.
Convenience
Convenience is a big factor in determining how Customers pay and how much they spend on purchases.
If you don't offer Customers a convenient choice, it can add immense friction to the buying process, risking a successful sale. For example, an increasing number of Business Customers I speak to say they'll take their business elsewhere if their Supplier doesn't offer flexible payment options, such as credit and trade terms or ‘Pay in Instalments’ options.
To prevent the loss of sales, Suppliers can remind Customers about available payment options throughout the customer journey so they're not surprised when it's time to pay for their orders. One easy way to do this is to display the options on your sales documents (proposal, quote or tax invoice) and e-commerce websites.
Procure-to-Pay
Funding is the critical point in the procurement journey for any business, where all payment and finance options should be visible. This is also where Suppliers of products and services will want to reduce delay as much as possible for their Customers. The final act of payment can happen in procurement hubs, eCommerce checkouts, e-invoices or via an instalment payment link gateway. Adding a flexible payment option like Procuret can help prevent Customers from leaving the procurement process without completing the purchase.
Businesses react to lumpy invoices as much as Consumers. They may be unsure about committing to paying the full price upfront. But if they know they can pay in instalments on a fixed schedule, they have more flexibility in managing their business cash flow and staying on budget.
Procuret’s ‘Pay in Instalments’ is increasingly becoming popular with Businesses from professional services for a number of reasons, including convenience, flexibility, and transparency. It's also one of the fastest growing B2B payment methods in Australia and New Zealand today.
This brings me to another c-word: collect. Fast payment methods enable a Supplier to reduce outstanding debtors, improve cash conversion and effectively outsource trade credit and administrative processes. The change will be worth it once you start to collect incremental revenue, new customers, and more sales much faster, with fewer headaches.
You can reach out to me - zac.u@procuret.com if you are a Supplier or Service Provider looking for a flexible payment option to offer your business customers.
