Best Practices for Purchase On Account Functionality

B2B buying decisions are no longer simple matters that the company president or purchasing manager decides based on long-term loyalty, cronyism or the ability to get a good deal. Customers are following a more complex decision-making process that involves using platform-enabled support services and assessing each B2B company’s credibility, ordering convenience, ability to customize products, purchase on account, social chatter about the company, customer reviews, business ratings and customer service processes for providing quick answers to product questions to assuage increased product skepticism. The authority to make decisions has drifted from single key company officers to multiple business stakeholders and buying committees.

However, a classic loyalty-generating strategy still works in the digital environment as well as it ever did in wholesale and retail sales in face-to-face encounters. Offering customers in-house accounts for making B2B purchases offers strong incentives for companies to do business with any given eCommerce platform, and software customizations and automations update this classic practice for the digital age of instant communications.

Purchasing on account is a powerful inducement to encourage sales and customer loyalty, and the process works similarly to offering store credit at the retail level. However, the process actually works more like American Express cards where card holders repay their full balances at the end of each billing cycle. B2B companies that offer their customers credit terms do so for many reasons, and the terms usually specify NET payments within 30 days.

Offering credit to online customers has its drawbacks and risks, but back-office customizations can improve the odds of curating successful and profitable long-term account relationships by offering in-house buying accounts. These operations can save processing costs with customized B2B payments, get more comprehensive profiles of their customers, simplify their own administrative tasks when processing orders and encourage greater customer loyalty.

B2B Technology for Managing Customer Accounts

Extending credit terms at the right time in the sales process can foster conversions more efficiently than almost any other sales strategy, and knowing when to deny credit can avoid unnecessary collection costs and write-offs. Technology customizations of B2B eCommerce platforms can simplify and automate these decisions and provide third-party integrations that manage risks such as insurance for B2B invoices and invoice factoring for selling credit-worthy invoices in cash flow emergencies.

B2B back-office automation for billing and qualifying customers for purchasing accounts simplifies the entire process of B2B invoicing, generating customer loyalty, encouraging faster payments and offering standard 30-day NET credit terms or longer financing periods for companies that have seasonal sales fluctuations or special billing needs. Offering these accounts generates major benefits in four key areas that include customer convenience, sales convenience, ordering convenience and greater customer loyalty to the business brand.

Software customizations can also generate automatic credit checks of customers, qualify business associates and protect the financial information of customers so that B2B operations comply with DSS and PCI regulations. Today’s eCommerce platform provides many versatile functions for customers when companies develop the right custom features and automatic processes to promote business.

Few areas can provide greater returns than offering customers purchasing accounts that facilitate multiple ordering needs and satisfy one overwhelming concern that every B2B customer has to some degree—anxiety about paying for products before receiving them. Software integrations and customizations organize efficient qualification processes and investigation workflows, optimize collection processes, speed credit decisions, manage risks, synchronize account management, protect confidential financial information, streamline invoicing and monitor customer information in real-time over the course of the business relationship.

Customer Convenience Integrations

Purchasing accounts offer many benefits for B2B customer that include empowering employees, business associates and company stakeholders to log-in to parent accounts and order goods and supplies without dealing with any payments. Customers can set limits for each user, issue purchasing or B2B procurement cards to staff or just authorize the workers directly with the B2B company based on a check-in code, ID card or other mutually agreed authorization method. Staff can then make purchases directly with the B2B supplier without accepting any responsibility for paying the bill like an authorized user of a company credit card.

Back-office customizations manage authorizations, send automatic reminders, initiate collection efforts, integrate regular credit reports and help company decision-makers to manage risks and develop sound business practices that provide customers with extraordinary conveniences in their ordering processes and abilities to place orders, take advantage of bulk discounts and develop great partnership-level working relationships with the B2B company.

Companies that buy invoice insurance can offer credit terms without risk, and the benefits for buyers include simpler ordering, ability to place larger orders, faster order fulfillment and a clear process for delegating buying tasks to staff, stakeholders, branch offices and departments.

Other conveniences of B2B purchasing accounts include simplifying the ordering process when companies use a purchase order system to place orders. The rules, proposals, negotiations and final authorizations can become complex, but B2B companies can handle these costs of doing business easily with digital tools and back-office customizations.

Account Statistics to Change How You Think About Offering Credit

Many B2B companies fear offering accounts when business customers have many payment options, and others worry that they’re subsidizing their customers with interest-free loans for 30 days. While these fears are valid to some extent, there are many ways to mitigate the risks to acceptable levels, and in-house purchasing accounts generate real competitive advantages. Today’s eCommerce platforms function as business partners for their customers, and helping them succeed increases a B2B company’s sales and success.

Statistics show an increasingly favorable lending climate for SMB, and big banks are making more loans and alternative lending is increasing, so offering B2B credit makes sense in the current market. Although one study by Atradius found that American companies encounter some problems getting paid on time, only 50 percent of businesses bother checking business credit worthiness. Payment terms average 28 days, but payments average taking about 48 days.

However, assessing fees and interest for late payments, carefully using modern tools to check and monitor credit continuously and using best practices for risk management ensure that companies have little to fear and much to gain from offering their best customers purchasing accounts.

Risk management is certainly a concern when granting trade credit, but the risks are no more unmanageable or expensive than other areas of risk for which companies routinely buy insurance. Insurance companies typically offer invoice insurance to mitigate the risks of nonpayment, and these companies usually require a dynamic partnership with B2B companies that allows them to set credit limits and investigate new customers before insuring them. Back-office third-party customizations and integrations can optimize risk management for B2B companies and leverage the third-party services of expert insurance investigators from around the world to qualify prospects, set limits and cover any losses on credit accounts.

Tips For Offering B2B eCommerce Customer Accounts

Clarity Ventures doesn’t qualify prospects or make specific recommendations for granting credit, but our experts can customize your software so that your company’s risk management team can do these jobs or enlist third-party support in the process. Managing credit accounts, storing financial information and running credit checks generate difficulties for B2B organizations unless they have fully integrated back-office features to manage the process and provide secure storage, limited access to financial information and robust business tools to manage customer relationships, credit processes and collections.

That’s an area where we excel, and we’ll work with your IT and credit staff to design a system that automates these processes with all the essential security protocols needed to satisfy regulatory agencies and insurance providers. We can design a world-class accounts receivable management system that ensures collectors and sales staff follow all your company’s collection procedures and industry best practices for granting credit, ensuring payments and meeting collections regulations. Call or contact us today to find out more about the advantages of offering credit accounts to your customers to generate more sales and build customer loyalty.