B2B payment automation explained: Everything you need to know

B2B payment automation is a comprehensive approach to streamlining the entire payment process — from purchase to reconciliation — between businesses. It combines fast, real-time payments with the seamless integration of Enterprise Resource Planning (ERP) systems to enhance efficiency and accuracy. This technology encompasses a wide range of payment channels, including eCommerce platforms, Point of Sale (POS) systems, Automated Clearing House (ACH) transfers, and more, catering to diverse customer payment preferences. By automating these processes, businesses can optimize their B2B payments and significantly reduce manual intervention and potential errors.

A key feature of B2B payment automation is straight-through processing, which allows for the immediate entry of payment data into ERP systems. This real-time integration enables instant payment verification for customers, enhancing their experience and improving cash flow management for the business. As payments are processed, the system automatically updates financial records, reconciles accounts, and provides real-time visibility into the company's financial status.

This seamless flow of information from payment initiation to final posting in the ERP system accelerates the payment cycle and provides valuable insights for financial decision-making. By accommodating various payment methods and automating the entire process, B2B payment automation solutions offer businesses newfound flexibility to meet customer needs while optimizing their internal operations.

How you pay matters, and selecting the appropriate payment method is critical for maintaining efficient operations and healthy business relationships. Let's examine the five primary B2B payment methods, each offering distinct advantages for different business scenarios.

1. Credit or debit cards

Cards offer immediate transaction processing and are ideal for smaller, frequent purchases. They provide detailed records for easy reconciliation but may incur processing fees that can impact profitability on larger transactions.

2. Wire transfer

Known for their security and speed, wire transfers are particularly useful for large, time-sensitive payments, especially in international transactions. While they offer a reliable funds transfer, the fees to wire money can be substantial, making them less suitable for frequent, smaller transactions.

3. ACH payments

ACH transfers are a cost-effective solution for recurring payments and large, domestic payments. They offer a good balance of efficiency and affordability, making them an excellent choice for regular B2B transactions within the same country but not always globally.

4. Digital payment services

Platforms such as PayPal and Stripe offer versatile payment options with user-friendly interfaces. These services often include features like invoicing and subscription management, making them useful for businesses with diverse payment needs or those operating primarily in the digital space.

5. Check

While less common today, checks are still one of the most common payment methods for B2B transactions. They provide a physical or digital paper trail and are preferred by some businesses for their familiarity. However, they are slower to process, often require human intervention, and are more susceptible to fraud compared to electronic methods.

Manual B2B payments are like that old clunker you might see in a driveway – functional, but costly. As a business owner, you're likely familiar with just how archaic and slow traditional payment methods are, but have you considered their true cost?

Manual payments can cost you time, money, and opportunity. Your accounts payable team could be spending hours managing vendor invoices, scheduling payments, and reconciling transactions. This time-consuming process not only delays our ability to close books efficiently but also increases the risk of errors and late payments. So instead of having the up-to-date financial info you need to grow your business, you're stuck in wait-and-see mode while all those payments get processed.

Human error compounds these issues. When it comes to finances, small mistakes can have big consequences. Manual data entry and calculations breed errors – a misplaced decimal here, a transposed number there, and your books spiral into chaos. These aren't mere inconveniences; they can spark payment disputes, strain client relationships, and impact your bottom line.

Delayed payments further exacerbate the problem, becoming a game of financial hot potato where you always lose. Manual processes can lead to lost invoices, stalled approvals, and unreliable cash flow forecasts. The repercussions ripple through your business operations, potentially leaving you unable to pay suppliers, missing growth opportunities, or facing a severe cash crunch.

Moreover, tracking payments and reconciling accounts manually is like navigating through dense fog. It’s difficult to make big decisions based on incomplete or outdated information. This lack of visibility hinders accurate cash flow forecasting, complicates how you identify late-paying customers, and increases the risk of fraud or discrepancies. In our data-driven era, this financial blindness isn't just inefficient — it's perilous for your business.

The good news is that the business landscape has embraced more digital payment processes, and manual B2B payments are becoming obsolete. They're time-consuming, error-prone, and leave you operating in the financial dark. As we move forward, it's clear that embracing automated B2B payment solutions is a necessity for businesses aiming to thrive in today's fast-paced market.

Accounts Payable (AP) teams face increasing pressure to improve efficiency, accuracy, and compliance. B2B payment automation has emerged as a crucial tool to meet these challenges. Here's why it's become indispensable for modern AP teams:

1. Improved accuracy and reduced errors

Manual processing can create errors, with studies showing error rates as high as 3-5% in manual data entry. Automated invoice processing features dramatically reduce these B2B payment mistakes through a combination of automated data capture and validation, two way matching of purchase orders, invoices, and receipts, and the elimination of duplicate payments. By leveraging invoice automation software to minimize human intervention, you’ll get consistent accuracy across all transactions. This not only reduces costly mistakes but also improves overall financial integrity, providing AP teams and company leadership with reliable data for decision-making. The ripple effect of this upgraded accuracy impacts the entire organization, from more reliable financial reporting to increased confidence in budgeting and forecasting.

2. Enhanced compliance and audit efficiency

Staying compliant with ever-changing regulations is a significant challenge for AP teams. Automated bill payment software helps by maintaining detailed digital audit trails, enforcing standardized processes that align with regulatory requirements, and providing real-time visibility into all transactions. During audits, these features translate into significant time savings. What once took weeks of preparation can now be accomplished in hours, with all necessary information readily available at the click of a button. This not only reduces the stress and workload associated with audits but also minimizes the risk of compliance violations. Further, the ability to quickly access and analyze historical data allows AP teams to proactively identify and address potential compliance issues before they become problems.

3. Cost reduction

According to a study by Ardent Partners, best-in-class AP departments leveraging automation reduce invoice processing costs by 80% compared with manual methods. These teams are also able to process invoices 74% faster and capitalize on 96% of available early payment discounts. These efficiencies translate into significant cost savings. Beyond direct cost savings, automation also reduces indirect costs associated with error correction, compliance violations, and missed business opportunities due to inefficient processes. As organizations increasingly look to AP departments for strategic finance, these cost reductions can meaningfully impact your bottom line.

4. Strengthened financial controls and fraud prevention

Automation helps stave off fraud through a multi-layered security approach. Enforcing segregation of duties, implementing multi-level approval workflows, and leveraging AI-powered anomaly detection combine to create a secure environment that mitigates internal and external fraud attempts. By automating checks and balances, organizations can detect and prevent fraudulent activities more effectively than manual systems. This approach protects the company's financial assets as well as its reputation. In an era where financial fraud is getting more sophisticated, today’s companies cannot afford to overlook payment automation.

5. Improved vendor relationships

B2B payments made through accounts payable automation software can really upgrade your vendor relationships. By ensuring timely, accurate payments, providing self-service portals for vendors to check payment status, and facilitating faster issue resolution, you’ll set the foundation for more collaborative vendor partnerships, which can resulting in better terms and priority service. When vendors can easily access information about their invoices and payments, it reduces the need for follow-up calls and emails, saving time for both parties. Moreover, consistent, on-time payments build trust and can earn your company “preferred customer” status, which can be a significant competitive advantage.

Your customers are what keep your business, well, in business. B2B payment automation can help you deliver a premium experience for your customers. Here are four benefits that will help ensure you’re worthy of your customers’ business.

1. Strengthening trust

Automated B2B payments enhance trust between businesses and their customers. By ensuring timely, accurate payments, companies demonstrate the reliability and professionalism required for long-term business relationships. Customers appreciate the predictability and efficiency of automated payments, knowing they can rely on prompt invoice settlement. This reliability often translates into increased customer loyalty and a stronger, more positive perception of your business.

2. Opportunities for discounts and better terms

When businesses consistently make prompt payments through automated systems, they become preferred customers. This reliable payment history can open doors to negotiating better terms with suppliers and vendors. Many suppliers offer early payment discounts, which become more accessible with efficient payment automation. These discounts can lead to substantial savings over time and meaningfully impact the bottom line. Moreover, a track record of timely payments can result in more favorable credit terms, extended payment periods, or priority service, all of which increase your business’s financial flexibility and operational efficiency.

3. Enhanced communication and transparency

No one wants to be kept wondering when they’re going to get paid, and even payors want to know if and when their payment goes through. That’s why payment automation systems often come with features to keep communication open between businesses and their customers. Automated notifications for payment receipts, upcoming due dates, and account statuses keep all parties informed without the need for manual follow-ups. This transparency reduces misunderstandings and disputes, fostering a smoother, more professional relationship. Clear, automated communication channels also make it easier to address any issues promptly, further strengthening the business relationship.

4. Increased focus on strategic relationships

Overall, automating routine payment processes will free up valuable time and resources in your business. This allows your teams to shift their focus from defense to offense — from micromanaging simple transactions to nurturing strategic relationships with customers. Instead of wasting hours on manual processing and reconciliation, your staff can dedicate more time to understanding customer needs, providing personalized service, and exploring new opportunities. This renewed focus on relationship-building can improve customer satisfaction, unlock more upselling opportunities, and build stronger, more profitable business partnerships in the long run.

So how do you take your B2B payments — and your customer relationships — into the future? By tapping a trusted automation technology partner that can efficiently support all your payment methods, reconcile your accounting, and scale as you scale.

Brex's B2B payment automation offers a powerful solution to the challenges of manual payment processes, allowing your business to grow without the growing pains. Let's explore how Brex's automation can revolutionize your payment workflows, execution, and reconciliation.

Streamlined payment workflows

One of the biggest hurdles in scaling a business is managing increasingly complex payment workflows. Brex's automated bill pay tackles this head-on by streamlining the entire process from invoice to payment to reconciliation.

Gone are the days of chasing approvals through endless email chains or Slack threads and then waiting for the right signatory to return from vacation. Brex's system enables you to set up custom approval workflows that match your organizational structure and internal policies. Payments are automatically routed to the right decision-makers, with reminders sent to keep the process moving.

With this streamlined approach, what once took days or weeks can now be accomplished in hours or even minutes. The result? Improved relationships with vendors, early payment discounts, and a reputation for reliability that can set your business apart in a crowded market.

"One of the business challenges we were facing was having a lot of contractor payments to make each month and organizing the process of those payments. Now we receive all of our invoices directly in Brex's interface, and we can review, approve, and pay all of our contractors in one place. And that saves us a ton of time."— Liz Braman, CEO, Revolution RE

Efficient payment execution

More customers ultimately means a more diverse customer base — and more diverse payment preferences. Brex understands this challenge and rises to meet it with a comprehensive suite of payment options.

From ACH transfers to wire payments, and virtual cards to checks, Brex's platform supports various payment methods in one, user-friendly interface. This flexibility goes a long way in showing your customers how easy it is to work with you. When they can pay in the way that suits them, it reduces any transactional friction and speeds up your cash flow. And for orgs with global vendors, Brex now allows you to pay them in their local currency. You’ll simplify operations and avoid foreign transaction fees by funding wires from your local bank accounts in Brex-supported countries.

Perhaps the best part is the AI-led optimization Brex provides. Brex's intelligent software can optimize payment timing and methods to maximize your cash flow and minimize transaction costs. For instance, Brex AI might suggest using a virtual business credit card for a purchase to take advantage of extended float or rewards, or recommend an ACH transfer to reduce fees for large, non-time-sensitive payments.

By providing this level of payment flexibility, you’re not stuck looking for solutions to make international payments or satisfy a specific customer payment preference.

“Brex allows us to spend and pay bills for our entities in local currency, which we expect to minimize our exposure to foreign exchange swings.ˮ— Mike Duffy, Director, Assistant Controller, Lemonade

Simplified payment reconciliation

As transaction volumes increase with your growing business, you can't possibly keep up using a manual reconciliation process.

Brex’s accounting automation software automatically matches incoming payments with outstanding invoices, regardless of the payment method used. This means no more sifting through bank statements, cross-referencing against invoices, and manually updating your books.

For any exceptions that require human intervention, Brex's intelligent software flags discrepancies and provides all the necessary information in one place for quick resolution. This not only saves time but also reduces errors and provides real-time visibility into your cash position.

Moreover, Brex integrates with popular accounting software, ensuring your financial records are always up-to-date with bidirectional syncing. You get accurate data in real time, an invaluable tool for businesses looking to make data-driven decisions as they scale.

A faster reconciliation process frees up your finance team to focus on strategic initiatives rather than getting bogged down in day-to-day transaction matching. This shift from tactical to strategic work will help your business appropriate the resources you need to scale more efficiently.

By simplifying workflows, enabling efficient payments, and expediting reconciliation, Brex empowers your business to grow faster, operate more efficiently, and compete more effectively in the global marketplace.

"Brex has helped keep the operations portion of our business lean where I can run it all myself with ease. The AI/auto ingest of bills in the bill pay app keeps my time paying bills to a couple minutes per week. All my team's purchasing cards and spend management, it’s all automated." — Jesse Kallman, Founder and CEO, Danti

B2B payment automation isn't a luxury — it's a critical business imperative, and Brex is leading the pack. If you're serious about optimizing your financial operations, consider Brex for automated bill payment and accounts payable automation.

Manual processes are fraught with inefficiencies, prone to errors, and a drain on your resources. Brex's automation eliminates these pain points, offering a robust solution that scales with your business. Your stakeholders will appreciate the tangible benefits. Customers enjoy prompt, error-free transactions. Your finance team can refocus on strategic initiatives rather than mundane tasks. And your bottom line? It will reflect the cumulative advantages of streamlined operations.

Don't be the company still clinging to outdated methods while your competitors surge ahead. Brex offers clear, measurable benefits that directly impact your bottom line. Sign up for Brex today and embrace the strategic advantage that will position your business for future success.

Want to see where B2B payments are headed? Download our ebook “The future of B2B payments” and see why modern financial leaders are ditching checks, wires, and ACH transfers to pay vendors and suppliers for corporate cards.