Standard Post

Business-to-business (B2B) payments are the lifeblood of modern commerce and the most common way for companies to send money to each other. But it means that Business to Business processes are also where you’re most likely to encounter fraud and inefficiencies, with more than half of respondents to a recent global survey reporting an increase in fraudulent activity over the past year. 

According to the latest survey from B2B International, the number of organizations reporting more significant concern over fraudulent activity has increased year-over-year, with 52% of respondents saying that the risk of fraud rose during the last year.

Source: Bottomline

While it’s tempting to make your payment process as easy as possible, you must ensure that your business payment acceptance method is safe from fraudulent activity and isn’t putting your company at risk. It doesn’t have to be this way—you can take steps to ensure your business stays safe and secure. One of the most important steps you can take as a business owner is to provide the right payment options for your order because that can make all the difference when it comes to minimizing your risks.

What Makes B2B Payments Different from Consumer Payments?

B2B payments are generally more complex than B2C payments. They tend to entail higher tickets and involve more parties. This complexity can make it difficult to know who is responsible for a payment, where the money is coming from, and where it is going. Therefore, before beginning any transactions, it is essential to have a clear understanding of the B2B payment process

One thing that makes this process different from other payment types is that invoices are usually required. In fact, without an invoice, some businesses may not accept your transaction at all. A purchase order number might also be needed in order to issue an invoice or deliver goods or services after a sale has been made.

How Does Your Payment Method Leave You Exposed?

Like most businesses, you probably accept credit cards from your clients. But did you know that your payment ecosystem must be PCI Compliant in order to prevent hackers from compromising sensitive cardholder data?

Even if your systems are compliant, you still must be diligent in handling client data, as well as in your manual review for fraud. All while operating your business – it can be hard to find the time!

Consider tokenization and alternate payment methods such as ACH if you want to keep your business working smoothly while protecting yourself from hackers and thieves. With a secure and efficient electronic invoicing solution, you never have to worry about going to the bank to make cash or paper-check deposits.

Since you’ll be handling sensitive information, it’s important to use a payment gateway that already has compliance and tokenization built in. In addition, payment gateways are a good option as they provide detailed reports on your transactions so you can monitor everything in real-time.

Why Do You Need To Protect Your Account Receivable Process?

Small businesses don’t have the resources or best practices to prevent fraud. Unfortunately, this leaves them vulnerable to payment fraud. The account receivable process is especially vulnerable, as 51% of businesses don’t receive payments according to terms, and 46% receive unusable remittance information. Makes it challenging to maintain track of your finances and make timely payments.

Source: Bottomline

To protect your business, it’s essential to understand the risks associated with different payment methods and take steps to mitigate them. Here are some tips for accepting payments securely and efficiently:

• A Payment Gateway will help ensure that payments are received correctly by removing the need for manual processing on your end. Even helps to reduce delays from customers paying on late-cycle days, which can lead to cash flow issues when receiving funds late due to weekends or holidays. 
• Payment gateways often offer features like remote invoicing, which allow you to send out invoices without needing recipients’ email addresses or postal address info. It also provides automated payment reminders via text message or email. 
• They provide automatic reconciliation of payments coming into your bank account and clear reports detailing all activity on the gateway, such as invoice payment activity and customer billing activity, so there’s no guesswork involved in determining if all payments were successfully processed.

How Can You Avoid Attacks On Your Accounts Receivable System?

One way to avoid an attack on your accounts receivable system is to formalize your internal controls. It means “clearly separating duties between the accounts receivable department and other departments within your organization.” 

Having formalized policies and procedures in place will help deter potential fraudsters and make it really hard for them to commit fraud if they can get past your defenses. 

Additionally, you should require strong authentication for all accounts receivable transactions. This could include using two-factor authentication or requiring a digital signature for all payments. You should also consider encrypting all sensitive data stored in your accounts receivable system. 

Finally, you should regularly review your system for any suspicious activity and investigate any unusual transactions promptly.

How Can You Avoid Attacks on Your Accounts Payable System?

To avoid getting falling into certain attacks, here are a few things you can do to help prevent attacks on your accounts payable system: 

1. Use an effective payment method that has fraud protection measures in place. 
2. Keep detailed records of all payments made and received. 
3. Be sure to verify the identity of anyone requesting payment before authorizing it. 
4. Never give out sensitive financial information (such as credit card numbers or bank account information) over the phone or through email unless you are absolutely certain with whom you are dealing. 
5. If you suspect fraud, report it immediately to your financial institution and/or the police. 
6. Review your accounts regularly to look for any suspicious activity. 
7. Make use of technology-based tools such as alerts that can warn you when transactions happen outside regular patterns, even if they’re legitimate transactions. 
8. Be proactive about educating employees on how to spot potential fraudsters, so they know what to watch for and report suspicions to the appropriate people within your organization.

Key Threats You Should be Worried About

When it comes to business-to-business (B2B) payments, there are a few key threats you should be worried about. 

• First, if you’re using a traditional payment gateway, you’re likely paying processing fees for each transaction. 
• Second, many b2b payment methods are still paper-based, which leaves them vulnerable to fraud and theft. 
• Third, b2b transactions often involve large sums of money, making them a target for hackers. 
• Fourth, as the global economy continues to digitize, businesses increasingly rely on online b2b payments, which can be susceptible to cyberattacks. 
• Fifth, some b2b payment providers have been known to hold onto funds for extended periods, which can cause business cash flow problems. 

It’s important to find out where your business stands when it comes to these five areas so that you can protect yourself from risk and make sure your financial needs are met.

Counterfeit Checks and Fraudulent ACH Activity

ACH debit fraud is a type of fraud that occurs when someone attempts to initiate or alter an ACH transaction in order to misdirect or misappropriate funds. It can happen in a number of ways, but the most common is through counterfeit checks. 

Counterfeit checks are often used to pay for goods or services that are never received or for goods or services that are significantly different from what was initially agreed upon. This type of fraud can be challenging to detect because the check may look legitimate.

What Should We All Be Doing as an Industry to Reduce threats?

We should try to keep track of our payments, and the industry can do below defined things to reduce fraudulent activity and loss in accounts payable: 

1. Screening new clients before adding them to your network.
2. Checking references and conducting due diligence on new customers. 
3. Implementing controls like limit checks and two-person approval processes. 
4. Keeping payment data secure by encrypting it and storing it in a secure database. 
5. Educating employees on the signs of fraud and what to do if they suspect something is wrong. 
6. Work with reputable accounts payable automation solutions that have built-in fraud detection capabilities.
7. Implementing stricter authentication methods like multi-factor authentication or knowledge-based authentication. 

Wrapping Up

Despite the fact that concerns over payment security are increasing, there are still many businesses that are not taking the necessary precautions to protect themselves from losses from fraud or inefficiencies. Therefore, if you accept payments from clients, it’s important to choose a reliable and secure method that will protect both you and your customers from loss. 

Luckily, there are plenty of options available, so you should be able to find one that meets your needs.

If you’re looking for a safe and secure way to accept B2B payments, ribbonPay has been trusted amongst its clients for over a decade is the best choice. We offer a variety of solutions to keep your payment processes safe and efficient, including electronic invoicing, advanced security protocols, and more. Plus, our team is always available to help if you have any questions or concerns. Contact us today to learn more about how we can help you protect your business.