Payment remittance is the process of transferring money from a payer to a payee or one person to another person. In B2B invoice payments, pay remittance refers to the payment made by the purchaser to settle the outstanding invoice amount due to the supplier.
It's hard to understate the importance of pay remittance in B2B payments. Prompt remittance is essential to improving suppliers' liquidity and cash flow and allows them to maintain a healthy relationship with their customers.
In this post, we'll examine what it means to remit payment and some of the more commonly used B2B payment remittance services.
Table of contents
What is payment remittance?
As mentioned above, payment remittance is simply the transfer of money from a payer to a payee. The funds could be transferred through:
- Wire transfer
- Automated Clearing Houses
- Credit cards
- Electronic transfer
However, regardless of which money transfer services are used, there are two distinct types of payment, those for B2B transactions and those for B2C transactions.
B2B payment remittance
- Amount due
- Due date
- Payment terms
- Tax information.
Once this invoice has been sent to the buyer's business bank account, the payment can be remitted and the transaction completed.
B2C payment remittance
The main difference between B2B and B2C remittances is how money is transferred between the two banks. For example, instead of using cash, cheques or ach payments, B2C payments are often made using an online payment processor such as PayPal or a credit card.
Customers favour this method as it is convenient and secure. After all, when customers can submit their payment information directly to the merchant's website, they don't need to carry out any additional steps in the same way they would if they were using a more traditional payment method.
Creating a payment remittance invoice
A remittance invoice should include the following information:
- The details of both parties involved. (Recipient & sender Full name, Brand name, address).
- The amount to be paid. (Cost of goods/services provided, applicable taxes, and payment fees.)
- An invoice reference number. (Used to track payments to the recipient's bank account).
- Payment due date. (Including information on a late fee).
- A signature from both parties (Signifying that they have agreed to pay).
Once you've compiled the invoice, you should process it per any applicable laws and regulations for remitting payments. This could involve submitting the invoices to a specific bank or credit union to initiate the transfer and ensure you get your money quickly. The financial institution will remit the payment on behalf of both parties, fostering a relationship of trust.
By creating a remittance invoice and making remittance payments through a trusted financial institution, both parties can rest assured that their transactions are secure and accurate. With this system in place, businesses can be confident that their work will be properly compensated for.
While a financial institution can make it easier to receive and send remittances securely, it's important to note that some payments may take longer than others to process. For example, international money transfers often take longer and may incur additional fees, depending on the exchange rate.
Throughout the process, both parties should be aware of the fees associated with remittance payments (on top of the initial fixed fee), alongside risks that could impact the payment process. This way, one party is not caught unaware should things go wrong. Both parties should also record and retain proof of remittance within their records for future reference, such as during tax season.
Advantages of using payment remittance services
There are many advantages associated with working with a payment remittance provider.
- They make it easier for companies to send money abroad, whether paying remote employees, vendors or suppliers.
- They improve cash flow by reducing delays and security concerns when sending invoices or accepting customer payments.
There are many benefits to using remit payment services for B2B payments, and we explore 4 of these below.
Speed and efficiency
When processing or sending out invoices or cash transfers, time is often of the essence. The most significant benefit of using a remit payment service provider is that they can process payments promptly and efficiently. Businesses receive money quickly, even if it's coming from different countries.
Security and reliability
Security is often a significant pain point for businesses of all sizes. However, pay remittance companies are heavily regulated, and use the latest technology to ensure that all payments are as secure as possible. For example, they rely on similar advanced encryption protocols to international banks.
This means they can protect businesses and individuals from fraud, data breaches and other malicious activities. This gives you peace of mind as a business owner but also means that you can alleviate any worries your customers may have when they send money to your business.
These companies are also reliable, as they are backed by international banking networks and use reliable payment gateways. This ensures that customer payments, in addition to being secure, are delivered on time and without errors.
In previous years, the common method for money transfers was a wire transfer or money order. While still used by many businesses, remittance services are more cost-effective for both the recipient and the person sending the money. They often offer favourable exchange rates when sending money abroad. This can reduce costs associated with managing physical locations.
Wide coverage and accessibility
Companies must use a money transfer service provider that can handle both local and international payments. Online remit payment services cover a wide area, including local and international payments. They are also available 24/7, regardless of time zone, which makes them an excellent option for urgent or emergency payments.
Additionally, customers can send money from any location at any time, provided they can access the internet. This level of convenience and accessibility is a great benefit for those who need to make or receive payments quickly and with minimum additional effort.
Factors to consider when choosing a remit payment service
Here are some factors you should consider when choosing one of these remit payment providers for your business.
Fees and exchange rates
If you are operating internationally, you need to pay attention to any additional fees you may incur when processing payments between different countries. Fees for sending money can vary from one provider to another, so you must find a service that matches your budget.
Payment methods and currencies supported
Offering a wide range of potential payment methods is the best way to ensure remittance payers don't face any unnecessary obstacles. It's also important to consider the types of currencies your chosen provider supports, as this will determine how many countries you can send money to around the world, whether they be middle income countries or developing countries.
Transfer speed and delivery time
When sending a remittance payment, it's essential to know how long it will take for the money to be received by the payee. Most companies offer various transfer speed options that vary in cost and delivery time.
Favouring those options that provide the quickest delivery time is ideal, especially when the payment requires urgency. However, it's also important to remember that any potential fees or charges are likely to be added on top of the cost of the remittance, so if you're looking for lower fees, consider slower processing times.
Top B2B payment remittance services
Now that you've got a better idea of what to look for in a payment remittance service, it's time to explore some of the top providers as an alternative to traditional pay remittance services that come with additional benefits.
Features & benefits
User reviews & ratings
A popular cloud-based subscription management platform, Chargebee helps companies manage their billing and invoicing processes efficiently, including remittance payments.
They offer multi-currency support, and numerous integrations with other third-party apps to help your accounts receivables team be more efficient.
|Users can process remittance invoices and receive payments with the help of automated email notifications.
Support for more than 26 currencies, with exchange rates to make it easier for customers to pay in their preferred currency.
Seamlessly integrates with third-party payment processors and accounting software to give customers a seamless experience.
|Chargebee has positive reviews and ratings from users due to its high-quality service and cost-effectiveness.
Offering services to over 9 million merchants, PayPal is one of the most popular payment processors.
They offer businesses a range of services, including the ability to remit payments and pay remittances with ease.
With PayPal, customers have access to an intuitive dashboard that makes it easy to manage finances as well as the ability to pay remittance invoices.
|Secure, encrypted platform that's trusted by millions of businesses.
The remittance payment process is easy to set up and execute, taking just moments to complete.
No added fees for international payments or currencies, making it an ideal choice for global businesses.
A range of fraud protection and risk management tools to help protect customers' data from fraud or theft.
Excellent customer service, with queries answered quickly.
24/7 customer support and a comprehensive knowledge base.
|PayPal's extensive suite of security features is one reason customers have rated it so highly when it comes to remitting payments.
Payoneer is another popular payment processor that allows customers to send and receive payments with ease.
It has a streamlined remittance process, allowing customers to create invoices, pay remittances, and track payments with ease.
|Customers can pay remittances in over 200 countries and currencies, and the platform also offers free international bank transfers.
Built-in fraud protection system that monitors transactions to prevent any fraudulent activities.
Real-time reporting and analytics access for all payments, providing greater insights into cash flow.
Customers who have used Payoneer's remittance services have given the platform glowing reviews, praising its affordability and ease of use.
Excellent customer service, with queries or issues quickly addressed by the friendly and helpful support team.
|Overall, users consistently rate Payoneer as one of the best remittance services in the market today.|
Payment remittance services play a critical role in the B2B payment process by ensuring that payments are securely and efficiently transferred from one business to another. These services offer a variety of features, such as global payment processing, multi-currency support, and fraud detection, that enable businesses to manage their payments more effectively.
When selecting a payment remittance service, keep your needs in mind and pay close attention to the capabilities of the potential provider to ensure they meet your requirements and can help enable your cash flow effectively.
Chaser's role in streamlining B2B payment processes
While Chaser is not a payment remittance service, it can be used in conjunction with payment processing platforms to help businesses manage their accounts receivables more efficiently. Chaser's receivables management software helps businesses automate and streamline their credit control and invoice-chasing processes, which can reduce the amount of time and resources required to manage payments. This can quickly put businesses on the path to success.
Additionally, Chaser's credit control software can further complement payment remittance services and help businesses to manage their accounts receivables effectively. By integrating with payment processing platforms, Chaser can help businesses streamline their payment processes, reduce errors, and improve cash flow management, even with multiple countries involved.
With powerful features like automated reminders, payment tracking, and analytics, Chaser makes it easier to keep track of your invoices and manage your remittances quickly and securely.