No matter which way you look at it, business finances are a huge component of everyday operations, and this is one aspect of the business that can be costly when something goes wrong. From startups to large corporations, all businesses can have their struggles with invoicing and billing, but B2B payments can be even more challenging than standard payments.
Whether you are consistently billing other businesses for products or services they buy from you or vice versa, proper billing is the key to ensure you get paid and don't pay out more than you should. Here is a look at just a few of the typical billing mistakes that you have to avoid with B2B payments.
1. Avoid verbal-only payment agreements.
Typically an issue among startups, verbal payment agreements for B2B payments are never a good idea. A sense of good faith in your fellow business owner breeds the misconception that you can trust every business owner you do business with. If you have a business supplier or client, invoice them just as you would anyone else. Likewise, if you have verbal agreements to pay for services or supplies for your own company, encourage the other company to send you an invoice. Verbal B2B payments lay a path for major billing mixups and mistakes down the road.
2. Make sure you accept as many payment options as possible.
Accepting an array of payment options helps to deter problems with receiving payments from those you are associated with. Due to the higher amounts that B2B payments can be, it is important that you accept payment solutions that the paying business owner has the ability to use.
3. Always clarify your payment terms and details within an invoice.
An invoice should be well-designed and contain all of the pertinent details related to the transaction, such as:
- When the service or product was purchased
- How much the invoiced party is expected to pay
- The due date for the payment
- What specifically the invoiced party is paying for
4. Create a late payment policy and stick to it.
Having a late payment policy encourages B2B payments to happen more quickly. Most businesses handle their invoices internally and often in bulk form, which means incoming bills get categorized by when they are due. Having a late payment policy encourages your payments to be made in a more timely manner. On the same note, avoid allowing certain clients to delay making payments in a timely manner without there being some kind of consequence.
To learn more, contact a resource that deals with B2B payments.