B2B buying

How B2B Buying Negatively Impacts Business

Businesses of all sizes, across all industries, often struggle with growing their business while waiting for payment on products and/or services they have delivered. Payment terms of 30, 60 days or more are convenient for buyers, but delays the benefit of the payment to the seller. Some transactions can be processed by credit cards, though most high-value transactions end up in the accounts receivable column of a company’s balance sheet.

Buyers immediately benefit from what they buy, whether it is a capital equipment purchase or professional services. The seller needs to wait to pay their staff, pay their taxes or make other strategic investments with the funds from the transaction. Waiting for checks to arrive, electronic funds transfers to arrive in the bank or other payments to be made is like watching a pot boil. It takes a long time, and a lot can go wrong when you are waiting. Consider what might happen if your business was not able to make payroll, remit on taxes or pay your office lease on time because of a delayed customer payment.

Accounts Receivable Collections Done Right

In some industries like logistics and transportation, companies will expedite payment of their invoices by contracting a freight bill factoring service provider. Credit management software is a more affordable and fiscally responsible arrangement.

Completing offline credit checks, extending terms which facilitate large sales and waiting for payment is a traditional, but inefficient way of doing business. B2B credit management software is not just for large companies; small businesses are often the most vulnerable when accounts receivables are not paid on time. If a company is looking to get acquired or expand through investment itself, banks and investigators do not like to see patterns of slow receivables collection.

B2B eCommerce

Secure online transactions provide convenience and ease of ordering for the buyer. Popular e-commerce engines like Shopify, IBM WebSphere and SparkPay provide powerful API’s for integration with accounting systems and credit management software. Ensuring a buyer is credit worthy before shipping product greatly reduces the risk of non-payment. B2B sales portals require significant investment to build and maintain, so expediting payments from your website should be a priority.

Ease of doing business and effective credit management are often primary considerations for companies shopping for a new vendor. The buyer can get the product and value they are looking for faster. The seller’s assurance of quick on-boarding time can be a strategic differentiator. Not extending credit to customers, or taking a long time to do so can cause you to lose business to those that do. Since your core business focus is likely not pursuing delinquent accounts, the expense of paying a collection agency can erode your profitability on the revenues you manage to recover.

Instead of missing out on recognizing a critical transaction for the fiscal year or quarter, ensuring a customer is credit-worthy before closing out the transaction tends to make auditors happy. If you have worked with auditors, you will know making them happy can be a difficult task.

Accelerating Days Receivable Turnover

The cost of contracting for cloud-based credit management software are far outweighed by the benefits of getting paid faster. Consider the peace of mind of not needing to worry about whether you can meet your own obligations while you are waiting for customer payments. Fast client credit approval will translate into customer loyalty. Your sales and service personnel can spend more time building high-value customer relationships instead of chasing bill payments.

Ensure the stability and growth of your business by ensuring online and offline transactions are secure, and leverage the increased cash flow to meet your obligations. If you can realize savings from early invoice payments, consider Apruve to be a way of offering your clients the same courtesy.

Call it a win-win.

To learn more about how Apruve credit management software can help your company to reduce the risk of extending credit for B2B transactions and accelerate payment, check out our data sheets page, or arrange a phone call with an Apruve solution expert.

B2C applied to B2B Ecommerce

What can B2B eCommerce Learn from B2C?

B2C and B2B eCommerce portals have their fair share of differences.

In a B2C eCommerce website, you cater to anonymous users who may or may not be familiar with your brand. On the other hand, a B2B website often requires users to be logged in and identified before they can place orders. In other words, B2B selling cannot exist without relationship building. 

By acquiring the right information about the user, B2B enterprises can tailor the entire shopping experience with elements like scalable pricing and special promotions.

In that respect, you can say that B2B eCommerce may have more efficient lead generation and nurturing processes. However, there are still B2C strategies that can be applied for B2B businesses:

Leads Aren’t Everything – Also Focus on Your Brand

A B2C marketer’s job is to supply prospects with all the information necessary to build their confidence enough to make a purchase. Additionally, B2C marketers focus on actively developing a well-known brand that people can trust and relate to. They don’t wait for a signup before they self-promote.

As a B2B marketer, you should never forget branding tactics like social media marketing, event sponsorships, display advertising, and influencer marketing. These strategies help put your brand out there and initiate the relationship building process before users even arrive at your site.

You can never make too much noise on the internet. Make sure you have a solid B2B branding strategy in place to build the confidence of your prospective buyers.

Emotional Engagement Still Works

The case of B2B vs. B2C is often associated with the comparison between an emotional and a rational buyer. By addressing the needs of customers and providing relatable content, B2C marketers are known to specialize in emotional engagement. 

On the other hand, B2B customers go to a website with a specific problem in mind. Some may be frustrated or angry, but most of them are willing to spend money for a solutionB2C marketers take advantage of this with strategies like storytelling and leveraging user-generated content.

Strategies that focus on emotional engagement may also work in B2B eCommerce. Since B2B marketers often deal with several decision-makers who calculate, you need a slightly different approach.

A good strategy is to launch an employee advocacy campaign and have them relate to your company culture.

Sales – The Simpler, The Better

Regardless if you’re running a B2B or B2C enterprise, your eCommerce site should be geared towards helping the audience make an easy purchasing decision. But due to the shorter sales cycle and lower price points, the selling process can be so much simpler in a B2C setup – resulting in a higher volume of sales.

Of course, there is no way for B2B companies to utilize the B2C infrastructure in optimizing the selling process. Take note that B2B eCommerce solutions can accommodate flexible payment terms, order minimums, and functions that focus on existing customers.

Instead of relying on a regular B2C shopping cart and payment system, you need a B2B-specific solution that can adequately match your B2B needs. You can also leverage credit management platforms that can make the process easier for both buyers and sellers.

Make Time for Traditional Advertising

A lot of B2B marketers focus on the digital storefront and forget to make time for traditional advertising practices. Granted, most B2C companies have brick and mortar establishments, which is why they are more likely to leverage “offline” marketing tactics. However, for the right B2B marketers, traditional advertising strategies such as direct mail, print ads, and TV commercials can still work.

Sending physical mail, for example, can be more effective than email marketing. Due to the shift towards digital marketing, B2B companies have less physical mail in their inbox.

By being one of the few who stick to the old practices, you have a much higher chance of getting noticed.

FINAL WORDS

B2B and B2C may be different, but some strategies can be useful for both. To help your B2B business grow, you must be willing to explore new strategies even if they are coming from the B2C environment.

On board your B2B customers

5 Ways to Get Your Customers to Use Your B2B eCommerce Site

Let me guess: Your B2B customers are hesitant to use your new online platform, aren’t they?

By now, you’ve probably heard all sorts of excuses from them on why they won’t purchase through your new platform. Others will tell you that it’s too expensive — even when it’s not. Others will tell you that the learning curve will take far too long — even when it won’t. Lastly, others will even tell you to your face that they don’t need your online platform — even if they obviously do.

With how the B2B customers are often such a tough nut to crack, you can’t help but ask yourself, “What points do I convey to my b2b customers to influence them to start using my online platform?”

That’s a great question to ask.

The good news is, we are all too familiar with the answer due to our years of experience working with countless buyers and sellers — and we’re going to share the answers with you.

These are some of the best points that you can raise.

1. 24/7 sales engine that runs like clockwork– even when your customers sleep.

Just because your customers are sleeping, shouldn’t mean that the capability to take in money should also “sleep.”

With your online platform, your customers will have a 24/7 sales mechanism that’s going to enable them to purchase even though they’re not in the office.

2. Save your customers from logistics nightmares.

Because the transactions are done through your online platform, your customers won’t have to bother themselves with too many logistics related tasks than they would if they were to run the orders manually by themselves.

The benefit becomes even more evident when your b2b customers’ buyers come flocking in droves. Your customers will have a better appreciation of how much time, effort, and resources your online platform can save them.

3. Easy tracking of orders.

Your online platform enables your customers’ buyers to track their orders easily.

While most sellers don’t see the value of this feature, plenty of online buyers, on the other hand, appreciate having the ability to track the status of their orders. It puts them at ease knowing that their orders were in fact processed, and it didn’t just fall through the cracks.

4. Easy product search/navigation.

Making it easy for your customers’ buyers to browse through your b2b customers’ products, and navigate their platform easily can help improve your customers’ conversion rate.

Considering how challenging it is to influence most people to make purchases online, it will pay your b2b customers dividends in the future if they make it easy for their buyers to find the products that they want.

5. Painless business process.

Emphasizing that the goal of your online platform is to help ease your b2b customers’ business process — and not change it entirely — is a crucial point to convey.

Your customers are often reluctant to use a new system for fear of the multitudes of changes that it will bring about in their business process.

When you come from an angle where your b2b customers see you as merely improving their business process and not change it entirely, it becomes easier for them to open up to the idea of using your new online platform.

We adopt a similar approach here at Apruve. Instead of entirely changing our b2b customers’ business process, we merely help improve it by making their system as painless as possible for them and their buyers. We do this through our online platform.

Takeaway

Reduced cost resulting to higher profit margin, fewer headaches, and a 24/7 sales mechanism that can process their transactions as they sleep (among other things); these are just some of the many benefits that your B2B customers crave for when searching for an online platform to run their business.

While most b2b customers are hesitant to integrate a new system or process in their business, influencing them to adopt your new platform is not at all impossible. The clearer you can convey to your customers how your new online platform possesses features that would give them the benefits that they are craving for, the easier it becomes for you to influence them to acquire your new online platform.

Credit Management Software can reduce your DSO

Problems Collecting Payments? Here Are 5 Proven Ways to Reduce Your DSO

B2B companies experience longer days sales outstanding (DSO) on average. In the U.S. alone, 42.5% of B2B invoices were paid late, while 5.6% are still unpaid by the 90-day mark, according to the Atradius Payment Practices Barometer results for September 2014.

DSO is the average number of days a company takes to collect revenue for sales made on credit. It indicates how quickly customers pay and how much cash the company converts from credit sales.

When sales either go uncollected or take too long to get collected, it hurts the company’s cash flow and debilitates day-to-day operations. The shorter the DSO, the better. It means a shorter amount of time for the company to collect money.

So how do you shorten DSO and strengthen your collection efforts?

Here are a few tips.

1. Automate business processes 

Based on a revenue cycle report by PayStream, automating the collection process helps companies reduce DSO by 10% to 20%, past due receivables by 25%, and bad debt reserves by 15% to 25%.

Data released by Forrester Research shows that about 75% of B2B buyers prefer to purchase work-related products online, but a meager 25% of B2B companies sell online. This only highlights the need for B2B sellers to step up their game in a world where the internet dominates many aspects of modern living.

Web-based credit collections management systems are your best bet for streamlining ecommerce processes. They are easy to implement and can handle end-to-end services, from credit approval to collections.

Systems like Apruve even allow customers to check out now from an online store and pay later. It consolidates multiple orders, invoices them per month, and takes care of credit collections.

2. Provide timely and accurate information 

Incorrect charges or late invoices can result in lengthy, headache-inducing disputes. Late invoices mean late payments, and disputes entail additional administrative costs on your part, particularly where communications management and relevant paperwork are concerned.

To minimize the chances of human error creeping into your invoicing procedures, consider integrating a web-based document management system into your processes to automatically send invoices to customers and other related documents via email.

3. Tighten credit requirements for new applicants

Credit has become a necessary arrangement for small and large businesses alike. While it offers a number of advantages, i.e. creating a strong base of regular customers, it also involves risks, such as incurring losses due to nonpayment.

Before extending credit to a new customer, consider the resources at your disposal. Would you have enough money to shoulder operating expenses while carrying receivables? Entrepreneur.com suggests that no matter how credit-worthy a customer is, “never extend credit beyond your profit margins.”

At the end of the day, a stricter credit policy decreases your risk of default payments. But too strict a policy may not prove competitive in the long term. Assess your tolerance for risk. Should you decide to be more liberal with your credit policies, gauge your willingness to do the legwork tied with credit management.

4. Offer more payment options

Not everyone has access to credit or debit cards, and some customers are not comfortable punching in their card numbers online due to security or fraud concerns.

By offering more payment options, you’re making your customers’ lives easier, which can translate to faster payments processing. Mobile or digital wallets like PayPal, Google Wallet, and Apple Pay are just some of the alternative payment modes you can offer on your ecommerce site.

5. Ask for downpayment or deposits

Advance partial payments minimize the risk of defaults. Requesting for them in advance also lets you assess the customer’s willingness and ability to pay.

Downpayment and deposit requests should be disclosed in your company’s terms and conditions. Generally, an amount equivalent to 20% to 50% of the commercial transaction forms part of the initial deposit. But because an advance payment is a risk on the buyer’s side, consider securing a bank guaranteeto dispel concerns regarding your company’s possible nonfulfillment of contractual obligations.

Conclusion

Selling on credit is one of the many ways companies attract both new and existing customers to purchase from them. It has become a way of life in today’s economy where competition is fierce. Despite this, never allow credit buyers to drag out payments. Take action and implement the necessary steps to solve the problem as soon as possible.

Faster B2B Sales

The Speed of B2B

The realities of a faster, more agile B2B sales channel

It isn’t news to anyone that today’s consumer wants, rather, demands that their goods arrive within two days. This behavior sets a precedent for Manufacturers and Distributors in B2B as well. Just because you’re selling to a business, doesn’t mean there isn’t a buyer at that business that shops at Amazon from the comfort of their home. Contractors, commercial purchasers, and professionals are used to interacting with large big-box retailers and e-tailers outside of their jobs. E-Commerce, in particular, has changed the scope of the buying conversation and the B2B sales channel is quickly catching up.

B2B E-Commerce
Long gone are the days where purchasers research products and business needs through paper catalogs, and long drawn out manufacturer ‘spec’ pages. The buying process is being facilitated through online product comparisons, user reviews, and suggested product features. If this information can’t be retrieved quickly, a would-be customer will opt to pursue another avenue where this information is readily available.

When a buyer purchases online they are not intending to spend hours researching, they are looking to make a purchase and have their materials shipped in order to move their own business forward. As a wholesaler, distributor or manufacturer, if you’re not online today investing in your B2B E-Commerce experience you’re already behind.

Business Buyer Expectations
‘Your business customers are expecting a B2C experience when purchasing business products’. Tired of hearing this at every conference you attend? For better or worse, it’s a phrase that holds quite a bit of truth. Not only are your business buyers expecting to shop online, they want your site to be easy to navigate, search and check out in a frictionless way.  

Sure, your customers can’t order hundreds of pounds of bricks and dry-wall and still expect it to be delivered within 24 hours however, they do expect the steps leading up to their purchase to be streamlined, easy, and at the push of a button. One-click checkout from Amazon has set the bar and B2B sellers need to act fast to follow in their footsteps. Millenials are becoming a buying powerhouse in B2C e-commerce and their expectations are going to flow directly into how they order supplies for their job.

The Paper Tiger
According to a 2015 Benchmark study by the Aberdeen group, it costs $31 per to process a paper check in comparison to an electronic payment at $9 per transaction. If you’re buying on terms, most sellers will still have their buyers fax in their credit application where it is then manually processed. As manufacturers and distributors continue to go down the path of investing in B2B e-commerce, paper processes are going to be replaced with cheaper and more time efficient digital based payment processing alternatives, including those for managing credit accounts – a standard practice within B2B e-commerce.   

When customers are expecting a faster buying experience, how long can you afford to hold onto legacy paper based processes?  

Moving Forward
If this is your first time thinking about bringing your business online, there are a number of e-commerce platforms that cater more to B2B needs. Solutions such as Apruve streamline your B2B credit management process and add value, increase customer on-boarding and reduce buying friction for your customer.

6 Steps to choose a B2B e-commerce platform

6 Questions to Consider When Choosing a B2B eCommerce Platform

Farmer Fiona Needs a B2B E-commerce Platform

The 6 Questions Fiona Should Ask When Choosing her B2B eCommerce Platform

Farmer Fiona is an imaginary and simultaneously enterprising urban farmer who grows sustainable, organic produce with extraordinary care and yields the snappiest snow peas, the pinkest radishes and the tastiest leeks in her town. With the number of restaurants clamouring for her products continually growing, it is time that Fiona decides which e-commerce platform that will see her business into its next phase.

Here are 6 questions that Farmer Fiona, and other B2B companies, should ask about the e-commerce platforms they are considering partnering with:

  1. Does it offer responsive design?

Farmer Fiona’s loyal clients browse through her offerings on their devices while sitting in empty subway cars at 3 AM, although they may actually place their orders from a computer sitting on a crowded desk in a corner of their restaurant’s kitchen.

Farmer Fiona needs a B2B E-commerce platform that is responsive, that follows her clients around as they move from device to device, making it easy for them to pick up exactly where they left off and complete their orders.

  1. Does the platform help with self–service?

Human beings, especially those who are chefs, like to do things for themselves: They want to be able to manage their accounts when and how they want to, without having to involve another human being. And if they’ve ordered fresh carrots and parsnips and they have not yet arrived, they want to be able to check on their location – by themselves.

Farmer Fiona needs a B2B E-commerce platform that makes it comically simple for her clients to do what they want to do.

  1. How do your current customers pay and are those options available?

Fiona’s clients require some flexibility in how they pay for their produce: Some clients pay 100% of their invoice at the time of delivery while others manage a tight cash flow and prefer to pay in equal averaged-out payments based on defined credit and terms.

Farmer Fiona needs a B2B E-commerce platform that offers variety in payment options, so that she is able to court all of her clients with options that meet their individual needs.

  1. Can you implement flexible pricing?

B2C businesses usually operate a clean, one-for-all pricing system but for B2B businesses, pricing needs to be agile, responsive to individual clients. Farmer Fiona, for example, offers the three clients that have been with her from her humble beginning in a four-acre lot, pricing that is unique to each of them.

Farmer Fiona needs a B2B E-commerce platform that offers allows for pricing that is as unique as her clients are.

  1. Are there SaaS options for e-commerce site?

An e-commerce site requires IT maintenance after it is up and running and Fiona has a decision to make: Should she use her occasionally overwhelmed IT department (composed of two people) to keep things running swimmingly or opt for an SaaS vendor that will take care of hosting and maintenance?

Farmer Fiona needs to decide whether the flexibility and control that an in-house commitment to keeping the e-commerce ticking is worth her investment of money and time.

  1. What integrations are available?

Fiona needs answers about how the B2B e-commerce platforms she is considering could be integrated with her in-house accounting system, and how much transparency would be built into the platform so that she can access the data she needs to fuel her business’s growth?

Farmer Fiona needs to get specific when she delves into the idea of integration and how a proposed e-commerce platform will fit in with her overall operation, including inventory controls and information systems.


One more thing that Farmer Fiona should do:

When choosing a B2B e-commerce platform, it is important to check out the competition. Fiona should make it her business to check out how a few of her competitors are doing e-commerce, and make a list of what works and what doesn’t, so that she has a concrete idea of what she wants before she starts serious shopping.