Are you a B2B Business?

If your customers are mainly or entirely other businesses you face some special challenges but also have some special tools available to secure your receivables. There are 3 main challenges getting paid on time, the cost of accepting credit cards and knowing who to give credit to. Below are some options:

Getting paid on time is a  real challenge businesses want to pay but are often facing their own cash flow problems and 30 day terms become 60, 60 become 90 etc. One option it to accept credit cards for payment and let the customer pay the financing charges. There are two problems here first many business customers who pay by credit card to so for rewards meaning processing their cards are more expensive than others. Even if it is not a rewards card any business card is more expensive to process than others. Add to this that normally they are processed with the card not being present and it gets even more expensive. There really is no way around the cost of processing but you can make it more convenient by storing credit card information on your processors server. It is never a good idea to store credit card information on your company server or in company files very dangerous and most likely outside of PCI DSS rules. However it is possible to set up a “virtual terminal” to store that information on the processors terminal.

Another option is setting up a PAD agreement which can be expensive to set up check the costs with your bank and determine if it makes sense for you. We are currently experimenting with a new system that allows you to email your client a payment request and they go online and authorize the payment. As we haven’t thoroughly vetted the system we won’t reveal the name of the company or recommend them. Also interact e-transfers work well if your customers are willing to send them to you, no cost to you usually $1.50 charge to the client. A cash discount could be applied to encourage this.

Most businesses do a credit check on new clients but what happens when an old client suddenly starts having problems you generally find out when you invoices take longer to get paid or the customer goes under. We are currently working with a new service that not only does the original credit check but will give you regular updates on your client’s credit worthiness. When an account goes bad the last guy to know generally has the worst losses this system helps you to be the first to know. The cost is reasonable and there are a number of options and packages to fit your business needs.

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