Bad B2B Payments Are a Sales Problem With an Obvious Fix

Word of mouth is a powerful force in B2B transactions.

A company known for slow, cumbersome or error-prone payment processes can find its reputation tarnished, leading to customer churn and lost opportunities.

Luxury retailer Saks, for example, missed hundreds of vendor payments and warned its suppliers last month that it may take months to get paid.

Conversely, prioritizing smooth payment experiences helps businesses enhance trust, accelerate deal closures and create long-term customer loyalty. Yet, despite these benefits, payments remain a pain point in many B2B interactions.

Late invoices, manual processing errors and rigid payment terms contribute to friction that can disrupt business relationships. When sales teams must step in to address payment disputes or chase down unpaid invoices, they lose valuable time that could be spent generating new business. In this way, as well as in many others, the hiccups that come from dated and overly manual B2B payments don’t just create headaches, they can actively undermine growth in a digital-first landscape.

The key to moving forward? Many businesses are finding success in transitioning B2B payments from an afterthought to an active piece of the buyer-supplier sales dynamic by integrating advances such as virtual cards and embedded payments, as well as by moving away from the manual processes tied up with paper checks.

Read also: B2B Payments Are Being Remade in Gen Z’s Image

The Hidden Cost of Poor B2B Payment Processes

By viewing payments as a core part of the customer experience, businesses can work to turn what was once a liability into a competitive advantage. For sales teams, the goal is simple: close deals and drive revenue. But when payments become a sticking point, salespeople find themselves in an unexpected role, that of customer support.

Late payments, disputes over invoice terms, and opaque payment processes can force sales reps into time-consuming conversations that have nothing to do with selling. This distraction can be costly in terms of productivity and potential lost revenue.

“At least half of B2B payments are still paper-based, particularly checks, and that creates multiple pain points,” Finexio Chief Strategy Officer Chris Wyatt told PYMNTS in November.

“These aren’t isolated problems. Everything is interconnected, and the inefficiency of manual processes all compound,” he added.

February PYMNTS Intelligence from the “B2B and Digital Payments Tracker® Series” found that in the most recent full year, 86% of general contractors reported receiving payments more promptly when developers employed digital payment methods. This shift not only improved cash flow but also fostered stronger relationships between developers and contractors.

“The middle to back office, they’re no longer just a cost center,” Meghan Oakes, vice president of customer success at FIS, told PYMNTS in December. “They’re a value-added partner for everybody within the business. There are many different aspects of that middle to back office that are now at the forefront of how companies operate.”

At the same time, the best sales reps are realizing the strategic importance of setting payment expectations from the first pitch, making sure buyers understand terms and options before the ink dries. In today’s market, if sales teams aren’t payment-savvy, they’re playing a losing game.

See also: Digitizing the B2B Payments Landscape Starts With … Sales?

Building a Payment-Savvy Sales Strategy

B2B businesses can take cues from their B2C counterparts, where payment innovation has been a driver of customer experience improvements. In B2B, digital wallets, instant payments and automated billing systems all can help to reduce friction and enhance satisfaction.

As Justin Downey, vice president of product at Maverick Payments, told PYMNTS last month about embedded finance solutions, regardless of which strategy is employed, “the key attraction is adding true value to your services and stickiness to the customer relationship.”

“For many of these banks and B2B software/platform providers, building the technology in-house or buying a firm will take too much time, attention and resources away from your core focus to allow you to maximize the full potential of this new revenue stream,” Downey added about white-label B2B payment solutions.

At the same time, it’s a two-way street between sales teams and B2B payments. Sales teams may also unknowingly close deals with high-risk customers, leading to potential revenue losses from non-payment. In many organizations, sales teams have limited visibility into the financial health of prospective clients. If a deal is closed with a high-risk customer — one that is slow to pay or has a history of non-payment — sales wins become a liability instead of a growth driver.

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