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Pay by Purchase Order
It’s relatively common for business customers to”pay” via a purchase order. The challenge for the vendor is to have precautions in place to make sure that only approved clients can use purchase orders, for preset credit limitations. There are ways to make this work.
First, require potential customers to complete an application that is reviewed by your client service team. Merchants sometimes enable the prospects to place orders via credit card prior to their application is reviewed.
Then enable approved companies to place orders via purchase order. Do this by logging in to your ecommerce platform and indicate that approval as well as the credit limit. Instead, send the approval and charge amount to your ecommerce platform through an integration with your accounting or backend software. That integration can permit the ecommerce platform to monitor offline orders and factor those into the available credit balance.
Online Credit Management
For clients with extended payment terms, you can consider online credit management solutions, for example Apruve. This enables real-time charge approval for new clients and the merchant is paid within one day of a dispatch, minus funding fees.
This may help customers, also, as it allows multiple buyers in their business to place orders, which are then lumped into one invoice that’s due on the 15th of the next month, or whatever payment terms are agreed to with the credit management support.
Thus an internet credit management service can simplify your customer’s experience, and enable your company to get paid quicker.
Business clients typically have a purchasing department and might use software as a component of the purchasing workflow. You can make it easier to buy from you by incorporating your ecommerce website with their procurement program. This is referred to as a procurement punchout.
For sellers, there are two general approaches for this: Integrate with every different procurement applications — such as Ariba, SciQuest, Coupa, SAP, Oracle — or incorporate with a facilitator, such as PunchOut2Go, which offers a single integration point and lets you provide a punchout to over 60 procurement software applications. (My firm, I must add, is a reseller of Punchout2Go.)
With a punchout, your buyer can begin on your website and fill up his shopping cart. Once he’s prepared to place the order, he can”punch out” and send the information from the cart into his procurement system. The punchout solution can end there, or it may continue so that if the buying department approves the order, the purchase order is electronically sent back to your ecommerce website. An extra integration could electronically send your invoice to buyer’s system after the order has shipped.
In my experience, some company buyers require their providers to provide punchouts. Beyond this, some B2B sellers provide punchout solutions to lure larger customers or new customer segments.
ACH and e-check payments are electronically withdrawn from the purchaser’s checking account, moved over an ACH system, and deposited into the seller’s checking account. You may configure your ecommerce platform to permit customers to pay via e-check or ACH. If you go this route, be sure that the cash is instantly available, without recourse, before sending the order.
In B2B ecommerce, the usage of credit cards may be complicated. The most frequent subject of complexity occurs when the order costs are greater than what was approved during checkout. This is common in B2B, when shipping fees are unknown in checkout, and if clients can edit orders once they are submitted.
In both these cases, merchants normally involve a programmer. The customizations include making additional API calls to the credit card gateway for additional authorizations from the client’s credit card.
Regardless, be certain you use a chip that will store the credit card information with no residing on your system. This is essential for safety, and liability.
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