What does remit payment mean in B2B invoice payments?

Payment remittance is the process of transferring funds from a payer to a payee. 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. Not only is prompt remittance essential to improving suppliers' liquidity and cash flow, but it also allows them to maintain a healthy relationship with their customers.

"Not only is prompt remittance essential to improving suppliers' liquidity and cash flow, but it also allows them to maintain a healthy relationship with their customers"

In this post, we'll be looking at what it means to remit payment and examining some of the more commonly used B2B payment remittance services.

Table of Contents

1. What is payment remittance? 
   - B2B payment remittance
   - B2C payment remittance

2. Creating a payment remittance invoice

3. Advantages of using payment remittance services 
   - Speed and efficiency
   - Security and reliability
   - Cost-effectiveness
   - Wide coverage and accessibility

4. Factors to consider when choosing a remit payment service 
   - Fees and exchange rates
   - Payment methods and currencies supported
   - Transfer speed and delivery time

5. Top B2B payment remittance services 

6. Summary 
   - Chaser's role in streamlining B2B payment processes 

What is payment remittance?

A remittance typically involves an electronic transfer of funds using secure banking systems such as Automated Clearing Houses (ACH), wire transfers, or credit cards. However, there are two distinct types of payment, those for B2B transactions and those for B2C transactions.

B2B payment remittance

For B2B payments, payment remittance refers to the practice of sending a remittance invoice from one company to another. This invoice will typically include the amount due and any other details that need to be settled for the transaction between the two companies to be completed.

For example, suppose a company is purchasing goods or services from another company. In this case, the remittance invoice will include the total amount due and any necessary details such as delivery date, payment terms, and tax information. Once this invoice has been sent to the buyer's business bank account, the payment can be remitted for the transaction to be completed.

B2C payment remittance

For B2C transactions, remittance payments are often made using an online payment processor such as PayPal or a credit card. This electronic transaction is convenient and secure, allowing customers to quickly and easily make payments without needing a cheque or cash.

For example, if a customer is paying for goods online, they can submit their payment information directly to the merchant’s website, and the transaction will be completed quickly with no additional steps necessary. This eliminates most of the paperwork and hassle associated with traditional methods in remitting payments.

Because the B2C payment remittance process usually involves a third-party payment provider, like PayPal, Stripe or WorldPay, these third-party providers act as an intermediary between the two companies and ensure that all remittance payments are processed in a timely manner. In addition to facilitating B2B remittance payments, these payment services also provide customers with a secure environment for making online payments. 

Creating a payment remittance invoice

• The details of both parties involved in the remittance, including full name and address.
• The amount to be paid and any applicable taxes or payment fees.
• A reference number that can be used to track the payment.
• The due date of the payment.
• A signature from both parties confirming that the details are accurate and that they agree to pay the remittance on time.

Once all this information is included in the invoice, it should be processed following applicable laws or regulations for remitting payments. This may involve submitting the invoice to a financial institution, such as a bank or credit union, to initiate the payment transfer. The financial institution will then remit the payment on behalf of both parties as agreed upon on the invoice.

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 invoices will be properly compensated for in a timely manner.

"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"

However, it is still important to note that remittance payments can take some time to process and should be planned accordingly. Additionally, both parties should also be aware of any applicable fees associated with remittance payments and any potential risks or limitations that may apply to the payment process. Once the payment is successfully completed, both parties should record and retain proof of the remittance in their records for future reference.

Advantages of using payment remittance services

Payment remittance services provide a streamlined and efficient way for businesses to transfer money to suppliers, vendors, or employees in different countries.

With the help of a remit payment service, businesses can easily remit payments from customers and vendors without worrying about payment delays or security concerns – allowing them to focus on more important tasks, such as running their business.

There is a range of benefits to using remit payment services for B2B payments, and we explore 4 of these below.

Speed and efficiency

Using a remit payment service provider ensures that payments are processed in a timely and efficient manner. Since the processing is outsourced to a remittance company, the process is completed quickly and securely, regardless of the sizes of the businesses involved.

What this means is that customers can receive their payments in a timely manner. Given the importance of cash flow and liquidity to businesses, this is an important advantage.

Security and reliability

Pay remittance companies are heavily regulated and use the latest technology to ensure that all payments are secure. As such, remit payment services have built-in security measures, including advanced encryption protocols, that protect both sender and recipient from fraud, data breaches, or other malicious activities. This provides businesses with an added layer of security and peace of mind, and customers can rest assured that their payment information is safe and protected from fraud or misuse. 

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.

Cost-effectiveness

Remittance payment services often charge lower fees and offer more favorable exchange rates than traditional methods, such as wire transfers or money orders. Additionally, many remittance payment services operate entirely online, which can help reduce costs associated with physical locations, such as rent or staffing expenses.

Wide coverage and accessibility

Online remit payment services cover a wide area, including local and international payments. They are also available 24/7, regardless of timezone, which makes them a great option for urgent or emergency payments.

Additionally, customers can send money from any location at any time, provided they have access to an internet connection. 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

Now that we've covered the benefits of pay remittance services, let's take a look at the factors you might want to consider when choosing one of these remit payment providers for your own business.

Fees and exchange rates

Given the international nature of remittance payments, you'll need to pay attention to both the fees and exchange rates offered by the provider. Fees for sending money can vary significantly from one provider to another, so make sure you select a service that fits your budget. Additionally, it's important to consider any applicable exchange rate as this will affect how much money is received in the remittance payee's local currency.

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're able to send money to arounproced the world.

Transfer speed and delivery time

When sending a remittance payment, it's important 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. 

Obviously, favoring 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.

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.

Summary 

In conclusion, 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.

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 to streamline their payment processes, reduce errors, and improve cash flow management overall.

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. 

Book a demo or start your free trial today to see how Chaser can help you manage your remittance payments and invoices.

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.