Accounts payable management for B2C businesses

How important are accounts payable for B2C businesses? Every business relies on accounts payable to clear its bills and run its day-to-day operations without blocks. But without proper spend management practices, it can be difficult to ace A/P accounting goals.


As B2C companies work with a wide range of customers, they are forced to stay on top of the accounts payable management game or lose customers for good.


Upgrading to the best account payable procedures is the experts’ recommended solution for instant B2C payments.


How can B2B companies strategize and streamline their invoice processing? Let’s get started.

What are accounts payable?

Accounts payable denotes the money a company owes to its suppliers, dealers, debtors, and even customers (refunds and rebates) for the goods or services purchased.


One best example is invoice processing. The accounts payable department receives invoices from vendors for the raw materials procured or services utilized. 


It also includes other expenses a business is liable to. Some examples are transportation and shipping, office rent and other bills, and employee payroll. 


A company’s balance sheet will include the overall money that’s pending to be cleared off as outstanding liabilities. It’s the responsibility of the A/P accounting team to do timely invoice processing to manage liabilities based on funds availability.


If the AP process is not streamlined, it can impact the cash flow and damage vendor relationships. 


No matter the size of a business, the accounts payable department always exists, as expenses are there in one form or another.

How different are B2C payments from B2B payments?

The significant difference lies in customer purchase behavior. B2C businesses deal with independent customers who are driven by gratification or need.


In most cases, they are the sole decision-makers, whereas B2B businesses directly deal with large or medium-scale key customers, who are very mindful of their requirements.


Customers’ buying pattern influences sales which depend on product manufacturing. So, B2C invoice processing is constantly changing, and there can be many unexpected expenses and invoices. 


Therefore, the B2C accounts payable process demands an accurate, fast, and flexible spend management solution. That’s where the need for organized accounts payable for B2C businesses arises.


Imagine this scenario. A typical B2C company receives multiple invoices throughout the month. It pays its employees and freelancers and also takes care of software subscriptions.


If they handle the payments as they come without an AP process, they are building inaccurate and unreliable account data. This data will not be useful in tax computations or revenue calculations. 


Instead of wasting time on manual accounts payable procedures, you can leverage technology and power your accounting system with the help of automation.


Implement a system that functions rhythmically to process accounts payable and makes you aware of what’s happening with the outgoing money.

Key steps in the AP process workflow

When you review your AP process workflow, you will notice three major steps. These steps fit any accounts payable transaction, notwithstanding the industry or business size.


Let’s break down the A/P accounting process into three steps to understand better and identify the areas of improvisation.


1. Completing a purchase order

Finishing a purchase is the last step of the buying process. You have chosen the supplier and gathered inputs from the concerned parties regarding the requirements.


Then you prepare and release a purchase order to your supplier to inform them of your supply demands.


This purchase order that a buyer sends to a seller contains the list of products, quantities, delivery information, and other specifications.


This document helps your supplier prepare and deliver your order on time.


2. Processing a receiving report

Your purchase order is sent out, and you have received your order. Within seven days of receiving the order, the receiving department must prepare a receiving report.


This receiving report carries the information about the quantity and quality of the products sent by the supplier. 


The accounts payable department uses this document to match and verify the invoice sent by the supplier later. This verification prevents sending wrong payments.


3. Receiving and processing the supplier invoice

The last stage is the payment stage, where you receive an invoice from the supplier and send money for the purchased goods.


The invoice carries the order details, the total amount you owe to the supplier, discounts applied, payment due date, and seller information. Different companies have different protocols when it comes to invoice processing.


Typically, supplier invoice processing involves verification of invoices by an accountant, followed by requesting approval for making payment. So, it can be challenging if you accomplish it manually and in large quantities. 


If the approvers say yes to the payment request, the accounts payable department sends money to the supplier.

Manage your incoming invoice payments in one place

As a B2C business, you receive payments from your customers as well.


For instance, if an e-commerce business sells toys, the customer purchases toys through the website and pays using a card or online wallet. Incoming invoice payments denote payments from customers in exchange for goods or services.


Being a B2C business, you will have to establish a multi-payment channel that lets your customer choose any payment model they want.


Whether cash on delivery or net banking, B2C customers expect the freedom to choose their payment method. 


However, what is the possibility of setting up the incoming invoice payments in one place despite having multiple channels?


Centralized payment solutions make it easier for customers and businesses to channel B2C payments through one spend management system

Track every due payment clearly

Whether B2B or B2C, Accounts payable is a liability you must pay on time. Tracking B2B payments is how you can be up-to-date about where your business money is spent and why.


There are a few reasons why your accounts payable team should get to the bottom of every payment and track it precisely.


• To avoid internal and external fraudulent activities.


• To keep track of payments and look for unnecessary spending.


• To avoid duplicate payments, where you pay the same bill twice.


• To not miss the due date, which leads to penalties.

How to track payments for your B2C business?

Tracking invoice payments are possible with the help of A/P accounting software.


By centralizing your account payables through a spend management system, you can track how much payment you process during a certain period. 


Accounts payable for B2C businesses make it possible to pay through a unified system, check pending payments, see processed payments, and download receipts. 


B2C businesses manage numerous vendors. Paying these vendors on time and keeping track of future payments is still challenging for these businesses.


Double payments can occur too, when a business fails to track payments. Thanks to modern A/P accounting software and its advanced features, they can track and schedule payments on time.


Know exactly who authorizes payments

B2C businesses often face moments where they scratch their head trying to figure out who the approver of a processed payment is.


Not knowing the approver can happen only when they don’t have clear accounts payable procedures and smart payment management systems.


But this is not a transparent system, where anyone can approve any payment and disappear from the system. 


Every finance team lays down ground rules and approval workflows for B2C payments. But they fail while implementing them by choosing outdated payment methods.


Accounts payable is responsible for showing who initiated a payment, who authorized it, and who received it.


The payment can be for a supplier or can it be a customer rebate; your spend management software should show primary and secondary approvers and the current status of the payment.

Track and process invoices with a good spend management tool

Volopay is the solution you have been looking for to strategize your accounts payable department.


A typical medium-sized B2C business processes 15-25 payments every day. The number can increase when we estimate this for a week or a month.


Volopay is here to automate your invoice processing. With Bill Pay, companies can pay local and international payments swiftly at low FX costs.


Want to earn your vendor’s goodwill by paying early? Schedule your payments before the due date and pay automatically. Track every payment made and its status on the Bill Pay dashboard.


Update or modify your approval workflow and let approvers know through push notifications. Sharpen your AP process and automate every step of it with the help of Volopay.


Got recurring payments? Fret not! We have corporate cards too, which you can use just like a regular credit card, and take care of monthly recurring expenditures instantly.


Accounts payable for B2C business can be challenging and tricky, but a smart spend management tool like Volopay can make it a stress-free experience.

Easily manage vendors and automate payments in a single platform