Mid-sized businesses, or middle market companies with annual sales ranging from $50 million to $1 billion, historically have been largely underserved in their business-to-business (B2B) payment needs.
As a result, many sellers and buyers are experiencing significant frustration with the B2B payment process, according to Deloitte. But to process payments more efficiently, more mid-size companies are looking to go more digital. The middle market is a key sector of the United States economy, with total revenues of over $6.6 trillion, Deloitte says. But for many organizations, B2B payment processing is problematic — and expensive, Deloitte says.
For example, 35% of businesses report high processing costs as a major challenge with traditional payment methods. And it costs a typical accounts payable (AP) organization nearly $8 to process a single supplier payment. Also, 62% of costs stem from labor, Deloitte says. But more mid-sized businesses are looking to add more digital payment processing options.
Eight in 10 B2B “buyer-supplier” sales interactions will be digital by 2025, according to Gartner. The biggest benefit is lower payment processing costs due to improved data quality and fewer time-consuming manual processes, Gartner says. Also, 64% of companies use electronic methods for at least half of B2B payments, says a 2022 survey from Bottomline, a payment services company.
Deloitte data about mid-sized businesses:
Businesses encounter multiple manual payment headaches
- 30% of mid-sized businesses quote payment processing time as a major issue.
- It takes an average of 30 days to complete a payment.
- 47% of suppliers are paid late for their products or services.
More mid-sized businesses want digital payment processing
- 74% of B2B buyers today research at least half of work-related purchases online.
- 30% complete at least half of their work-related purchases online.
- There is increasing focus on B2B ecommerce.
- 71% of businesses are capable of making electronic payments.
- 93% of image deposits are by businesses.
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