If you’re trying to streamline back-office processes and improve cash flow, the latest business-to-business (B2B) payment technology can help you do it. Below, we’ll explore how tech is helping address some of the greatest challenges with B2B payments, various technologies you can implement today, and what to keep an eye on to improve your payment processes even more tomorrow.
B2B Payment Technology is Addressing a Wide Variety of Challenges
B2B payments have always come with obstacles, but technology is beginning to change the landscape. Instead of being slowed down by outdated processes, you now have tools that solve some of your greatest payment challenges.
Late Payments
Just 42 percent of B2B invoices are paid on time, according to Atradius research. Once invoices slip past due, businesses typically wait an additional twenty days before receiving payment. Delays like these ripple through operations, slowing down cash flow and creating added pressure on growth plans.
Digital Payment Solutions Help Eliminate Late Payments
The leading reason for late payments in the United States is administrative inefficiency in customer payment processes, Atradius reports. Even willing customers often get bogged down by outdated systems. Around 40 percent of B2B payments are still made by check, per Alkami. Naturally, this method adds time and increases the chance of error. By introducing digital payment solutions such as electronic invoicing, automated reminders, and direct pay-now options, you give customers faster, easier ways to pay. The result is fewer delays and more predictable cash flow for your business.
Bad Debt
Eight percent of invoices are written off as bad debt, per Atradius. When receivables turn into losses, the impact extends beyond the missed income. Bad debt strains cash flow, affects financial planning, and can erode confidence in offering credit to new customers.
Digital Credit Control Tools and Alternative Funding Solutions Decrease Bad Debt
Technology is giving you new ways to protect against losses. Digital credit control tools provide real-time insights into customer payment behavior and help you identify risks earlier, so you can make informed credit decisions.
Automated reminders and collections workflows also reduce the chance of accounts slipping into default.
In addition, alternative funding solutions such as invoice factoring can help. Factors examine payment behaviors before invoices are accepted for factoring, thus reducing the risk of non-payment. You may also be able to leverage non-recourse factoring, which provides an additional layer of protection.
Together, these approaches help you reduce the burden of bad debt and keep revenue streams more secure.
Administrative Inefficiencies
Many late payments and cash flow delays trace back to inefficiencies in how payments are managed. Eight in ten businesses do not have a fully integrated payment system, according to Intuit surveys. Additionally, more than half still handle up to half of their payment operations manually, Modern Treasury reports. These outdated practices slow down approvals, increase errors, and make it harder for you to maintain visibility over your receivables.
Payment Process Automation with Integrated Systems Reduce Inefficiencies and Ensures Faster B2B Transactions
Modern tools connect invoicing, payments, and reconciliation into a single, streamlined system. By automating approvals, reminders, and data entry, you remove many of the delays and errors that come with manual handling. Integrated payment systems also give you real-time visibility into what has been paid and what is outstanding, so you can act quickly when something requires attention. The result is fewer bottlenecks, faster transactions, and a clearer picture of your cash flow.
Time Lost to Chasing Payments
A typical business wastes 14 hours each week chasing payments, according to Intuit. This diverts time from sales, service, and planning, and makes it harder to keep cash flow predictable.
Collections Automation and Embedded Payment Links Reduce Follow-Ups
Automation handles repetitive tasks, such as reminders, dunning sequences, and status updates, freeing you from constant follow-ups. Pair that with digital invoices that include “pay now” options, and customers have an immediate, convenient way to settle balances. As more of your transactions move away from paper checks and into integrated digital systems, the entire process speeds up. The combination means less wasted effort on collections and more reliable control over your cash flow.
You can also use small business factoring to help eliminate some of these hurdles. While it’s traditionally used to accelerate cash flow, the factoring company manages the collections process for you, returning hours back to your business each week.
Data Security Issues
Every payment you process carries risk. Manual methods such as paper checks or emailed invoices expose you to fraud, lost information, and compliance concerns. These risks grow as volumes increase, making it harder to protect sensitive data and keep transactions secure.
Risk is Mitigated Through Digital Secure Payments Versus Manual Processes
Digital payment systems build security into every step of the process. Encryption, multifactor authentication, and fraud monitoring protect sensitive information as payments move between you and your customers.
Because transactions are logged automatically, you also gain a clear audit trail that reduces compliance concerns and improves accountability. By shifting away from manual processes, you strengthen security and reduce the likelihood of costly breaches or fraud attempts.
Cash Flow Management Challenges and Growth Limitations
While many people think of these payment challenges as a minor annoyance or the cost of doing business, they have a deep and lasting impact. For instance, 89 percent of businesses say that late payments are preventing their growth, per Intuit.
Atradius research notes a myriad of additional challenges. Two in five say they have difficulties meeting financial obligations, and an equal number are slowing down supplier payments, which can damage relationships and credit. Nearly one-third say they have increased borrowing costs and are more reliant on short-term financing as a result of these challenges. More than half leverage bank loans to finance their companies. The interest eats away at profit, and ongoing payments can create cash flow management challenges for years to come.
Additionally, more than a quarter have stopped working with a buyer or supplier due to late or slow payments, according to American Express. While this puts an end to the payment delays, it also eliminates profit and can be damaging to a company’s reputation.
Addressing Underlying Issues with the Right B2B Payment Technology Keeps Businesses on Track
When you resolve payment challenges through technology, the broader issues tied to cash flow also ease. Tools that streamline invoicing, payments, and credit management prevent delays from compounding, so you can meet obligations, invest in growth, and maintain strong business relationships.
B2B Payment Technologies Your Business Can Leverage Today
Now that you have a clearer picture of how costly payment challenges can be and the advantages that come with addressing them, let’s look at the technologies available today.
Accounts Receivable Automation Tools
Managing accounts receivable manually takes time and leaves too much room for error. When reminders, reconciliations, and collections rely on spreadsheets or individual follow-ups, it slows down cash flow and increases the chance of missed payments.
Accounts receivable automation tools streamline these processes. They can send reminders automatically, generate detailed aging reports, apply payments to the correct accounts, and give you real-time visibility into what’s outstanding. The result is fewer errors, less time spent on collections, and stronger oversight of your receivables.
Well-known tools in this category include QuickBooks, Xero, FreshBooks, and Sage Intacct. Each provides slightly different features, but all are designed to reduce the administrative burden and give you a clearer view of what is owed.
Factoring can complement these systems by going a step further. While automation makes it easier to manage invoices, factoring provides immediate cash flow and typically includes professional collections support. Together, the two approaches can give you both efficiency and stability in how receivables are handled.
Automated Payment Platforms
Accounts receivable tools help you manage what is owed, but the payment itself still has to move. Automated payment platforms make that part easier by giving your customers fast, convenient ways to settle invoices. Instead of waiting for paper checks, you can offer options such as card payments, automated clearing house (ACH) transfers, or digital wallets built directly into your invoices.
Many accounting and AR systems already include this functionality. QuickBooks, Xero, and FreshBooks, for example, allow you to embed “pay now” buttons so your customers can pay the moment they receive an invoice. These integrations save time, reduce the risk of error, and speed up the payment cycle.
Credit Risk Management Solutions
Extending credit to customers is a normal part of B2B transactions, but it comes with risk. If a customer’s payment history is uncertain, you may end up with late payments or even write-offs that strain cash flow.
Credit risk management solutions give you the tools to make more informed decisions before extending credit. These systems provide credit checks, scoring models, and monitoring that alert you to changes in a customer’s financial health. They can also flag high-risk accounts so you can adjust terms or require upfront deposits.
Examples include services offered by credit bureaus, trade credit insurers, and platforms like Sage Intacct with built-in risk analysis modules. Each helps you better understand who you are doing business with and how much risk is involved.
Factoring supports this process as well. As mentioned, factors conduct their own credit checks and monitor payment behaviors before accepting invoices, which gives you an additional layer of protection and expertise.
ERP and Finance Suites with Payment Modules
As your business grows, managing payments in isolation is no longer enough. You need visibility across accounting, purchasing, inventory, and supply chain to see the full financial picture. Enterprise resource planning (ERP) and finance suites with payment modules fill this need.
These systems tie payments directly into broader business operations. Invoices, approvals, reconciliations, and reporting all flow through a central hub, giving you real-time insight into both cash flow and operational performance. By integrating payments with the rest of your financial processes, you reduce duplication, improve accuracy, and create a single source of truth for decision-making.
Well-known examples include SAP, NetSuite, and Microsoft Dynamics. While these suites often come with a higher price point and a steeper learning curve, they are designed to support complex organizations that need everything connected in one place.
Alternative Rails for Faster Settlement
Although factoring has already been mentioned as a solution to specific challenges, it is worth considering on its own. Factoring represents a different kind of “rail” for payments; one that accelerates cash flow by turning invoices into immediate working capital. Unlike traditional payment methods, which leave you waiting on customer timelines, factoring ensures funds are available quickly while also providing professional collections support.
At the same time, digital payment innovation is creating new rails alongside factoring. Real-time payment networks and open banking initiatives are designed to move money faster and more securely than paper checks or card-based systems. These rails can reduce settlement times from days to seconds, making them a powerful complement to existing processes.
Taken together, factoring and modern payment rails give you more options for keeping cash moving. Whether you need predictable liquidity through invoice funding or faster clearance on direct customer payments, these tools address the gaps left by outdated systems.
Emerging B2B Payment Technologies to Explore
While today’s tools can solve many payment challenges, new technologies are on the horizon that will reshape how you manage cash flow. Some are already being adopted, while others are still developing but are worth keeping on your radar.
Predictive Analytics for Cash Flow
Predictive analytics use historical data, customer payment patterns, and external signals to forecast when you will be paid and where gaps may appear. Instead of reacting after a problem arises, you can anticipate shortfalls and plan accordingly. This helps you adjust credit terms, negotiate with suppliers, or secure funding before cash flow becomes strained.
AI-Powered Categorization and Automation
Artificial intelligence (AI) is making payment management smarter and helping businesses grow. These tools learn how you code transactions, detect anomalies, and even suggest next steps based on real-time data. Over time, the system becomes more accurate, which reduces errors and saves hours of manual review. For small teams, especially, AI solutions with automation enable you to manage a higher volume without adding extra staff.
Robotic Process Automation
Robotic process automation (RPA) takes repetitive, rules-based payment tasks off your plate. Software “bots” can extract data from invoices, match payments to accounts, and update records automatically. The benefit is consistency. Tasks are completed faster and without the fatigue or errors that come with manual handling. For businesses with high transaction volumes, RPA offers a way to scale payment operations without inflating overhead.
Open Banking and Real-Time Payments
Open banking initiatives and real-time payment networks are creating new ways to move money securely and instantly. Instead of waiting days for funds to clear, transactions can be settled in seconds, so you get even faster access to cash. As adoption grows, these systems will help reduce reliance on paper checks and card-based processes, while offering customers a more seamless way to pay.
Streamline Your B2B Payment Processes and Cash Flow with Factoring
Factoring can work alongside these technologies or as a standalone solution to streamline your processes and accelerate cash flow. If you’d like to explore the fit for your business, speak with one of our factoring specialists.
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