What are online B2B purchases?
B2B online purchases, or e-commerce, include acquiring products on the internet with a physical or virtual card. The seller makes their portfolio of products, services, subscriptions and product information available online to make it easy for the buyer to make quick and agile decisions and purchases.
Online B2B purchases open up millions of opportunities for buyers and suppliers
More B2B suppliers sell their services and physical goods through webshops. Suppliers worried that traditional revenue streams would decrease, and buyers worried their procurement capabilities would be significantly diminished by supply chain disruptions and outdated procurement processes. Nevertheless, online purchases enable buyers and suppliers to a wide range of opportunities.
Purchasing teams can more cost-effectively get information on suppliers and make purchases quickly and conveniently. The buyer's location does not matter. They have the freedom and flexibility to complete a seamless purchase whenever they want.
Suppliers have the chance to extend their reach and improve sales effectiveness. But online purchases are not just small convenience acquisitions. According to McKinsey, 70 per cent of B2B decision-makers say they are open to making new, fully self-serve, or remote buys over $50,000. So, B2B online purchases will keep increasing, and buyers must have the proper processes and technologies in place to fully utilise the value of online purchases.
Saas Subscriptions in B2B
The online purchasing form also opened the door for SaaS subscriptions. The Covid-19 pandemic visibly worked as a catalyst for several businesses to move in this direction. Markets adopt subscription-based products and services faster than before due to their consistent income stream for suppliers and easy and convenient purchasing and set up for buyers.
Although SaaS Subscriptions can be flexible, they also present a risk of hidden costs. Businesses often end up with unused subscriptions that create additional and wholly unnecessary costs. To enjoy the unique benefits of the ever-popular subscription model, companies need to retain visibility and control over their various plans, especially in their indirect procurement strategy.
The benefits of automated online purchases
The lack of transparency and compliance could scare large companies from investing in these commerce forms. New, automated processes aim to simplify and provide transparency through the purchasing process while improving compliance and security. The whole organisation could benefit from this, starting from procurement, finance, and individual employees.
Online purchases and subscriptions typically fall under long-tail procurement, so there are a lot of purchases and suppliers to manage. So, it is crucial to have a simple and automated process for online purchases. Optimising the process will improve organisational agility and make procurement teams less dependent on otherwise complex processes. Often, there is no need to involve procurement teams in online purchases as employees can make purchases themselves. This allows procurement to focus on strategic suppliers and empowers employees to make smaller purchases – where approval happens before the purchase.
Especially removing the need to onboard long-tail suppliers will save valuable time and resources
and prevents one-time suppliers from filling up the enterprise's systems. But the contrast – not collecting any information on used suppliers – is not sustainable either as visibility into spend disappears. Therefore, a procurement solution that both removes the need to onboard suppliers and still collects supplier data from the transaction itself is necessary.
In the case of subscriptions, procurement teams can track all the running recurring payments, set limits and lock the virtual cards to a certain supplier.
Long-tail spend has been causing financial problems for years, and it is no different for online purchases. Manual tasks, payment risk, and maverick spend are all symptoms of inefficient procurement processes. You can easily solve these problems with a simple and automated purchasing process. One that utilises virtual cards to make payments handle pre-approvals se
aimlessly and provide a complete audit trail for compliance and accounting purposes. This will
remove the need for Accounts Payable to become detectives and track down employees when 'wild invoices' start piling up. And it is a beneficial way of mitigating risk throughout the entire procurement process.
By using virtual cards, enterprises can use proven payment rails that improve cash flow by offering immediate payment to suppliers while extending the buyer's payment terms. This will also allow the enterprise to collect transactions for online purchases on a single monthly invoice. You can free up valuable resources in Accounts Payable by moving away from handling invoices individually.
With automated receipt collection, we can also remove a huge burden from the shoulders of finance teams. They don't have to chase employees anymore for missing receipts on purchases.
Companies are digitising their business like never before, and Covid-19 has further accelerated this transformation. With online purchases specifically, B2B sellers have been required to expand their online sales capacity to ensure continuous sales. At the same time, you might demand the same online purchasing features that B2C consumers have. Buying must be easy, transparent, and secure.
Fully digitalised business processes are required to ensure that business operations can proceed. T
his also counts for long-tail procurement. It is a key reason why more intelligent online purchases will enhance the enterprise's procurement capabilities and allow employees to make purchases
Simplified and automated online purchasing benefits any employee involved in the procurement process. Innovative cloud-based procurement solutions are the key to process efficiency. We can include managerial or automatic pre-approval. by business rules. When buying subscriptions, additional steps can be added to the approval flow, like legal or IT security for compliance. As a result, employees who need to purchase can easily make purchase requests and get approval. At the same time, managers can easily approve purchases and get improved visibility into their department's spend.
The online solution is not for everyone
Even if there are great opportunities for B2B online purchases, many companies are not ready internally to take advantage. Outdated purchasing processes are to blame for complications. They are not efficient for the new online shopping features and result in an unnecessarily long and expensive process. For example, accounts Payable must often handle invoices individually and experience heavy workloads because it's easier for employees to purchase by invoice and leave the administrative mess to Accounts Payable. But it results in a complex, costly, and manual process.
There is no doubt that the increase in online purchases is here to stay – and will continue to grow in the future. Handling these purchases through smarter cloud-based procurement solutions will undoubtedly improve cash flow, employee efficiency, and organisational agility.
Mazepay utilizes more innovative payment technologies to provide a simple, automated, and secure process for online purchases through our cloud-based solution. Get in touch with us to learn more about how Mazepay will help you simplify your business.