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B2B Invoices

With invoice payment the most popular payment method among B2B buyers, merchants and marketplaces shouldn’t be thinking about whether to offer this option to their customers but rather how to do so.

Merchants have two options: They can manage invoice payment in-house or outsource to an external payment service provider. In this article, we’ll take a closer look at each option and discuss their advantages and disadvantages.

The invoice payment process 

Invoice payment is more than just writing an invoice. B2B merchants need to be aware of the various factors that enable the successful processing of this payment method.

  • Identity check, scoring, credit check
  • Risk management
  • Accounts receivable management
  • Dunning, collection

Manage invoice payments in-house or outsource it?

Whether it makes sense for a company to manage invoice payments in-house or outsource to a professional payment provider depends on various factors, such as the company’s size, sales volume, financial experience and customer base. Both options have advantages and disadvantages, which are highlighted below based on the following aspects: Control, effort, cost and risk.

Managing invoice payments in-house

The great advantage for B2B companies that manage their own invoice purchasing is they retain complete control and enable customers to have a direct relationship with their company at all stages of the purchasing process. However, there are also significant drawbacks to keep in mind:

Risk of non-payment

Even with close monitoring, some clients may not pay their bills, leading to bad debt and negatively impacting cash flow. To avoid this risk of late or non-payment, merchants must have a well-functioning receivables management system to ensure all invoices are prepared correctly and payments are received on time. This requires careful monitoring of outstanding payments and a quick response to late payments.

Time and personnel requirements

Managing invoice purchasing independently also requires a significant time commitment. As a result, companies must either hire more staff which incurs additional costs or have their existing staff neglect tasks in other business areas. Accounts receivable management requires a high level of attention, care and time!

Lack of data

To adequately assess the creditworthiness of customers, a large amount of data is required, which many B2B merchants don’t often have. On the one hand, this can increase the risk of payment defaults if clients are approved without being properly vetted, and on the other hand, it can lead to customers being wrongly rejected or the credit check taking too much time. As a result, customers may abandon the purchase process prematurely and switch to a competitor. Both options can result in a loss of revenue for the merchant.

Outsourcing invoice payments 

When using a provider to manage invoice payments, there may be costs involved that B2B merchants should be thoroughly aware of upfront. Some of these costs are:

  • Transaction fees: The provider may charge a fee for each transaction. This fee may vary depending on the size, complexity and number of transactions.
  • Service Fees: Some providers may charge a service fee for special services.
  • Monthly Fees: The provider may charge monthly fees to use their system and technology.
  • Currency Conversion Fees: A currency conversion fee may apply if a transaction is made in a currency other than the provider’s default currency.
  • Setup Fees: The provider may charge a one-time setup fee for integration.

However, merchants can experience significant benefits by engaging a payment provider specializing in invoice purchases for B2B transactions, making any costs incurred financially worthwhile. 

Pass on the risk of non-payment

B2B merchants eliminate the risk of non-payment when using a payment provider. B2B merchants receive the invoice amount directly from the payment provider after a purchase, who collects the unpaid invoices in case of default. 

More time for business growth

In addition to the financial aspects, the amount of time required for the accounts receivable management also plays a major role in the decision to use a payment provider. When the payment provider takes over the processing of invoice purchases, merchants have more time and resources to focus on other important aspects of their business.

More data for greater security

A payment provider has access to lots of data, so customers can be comprehensively checked before approval. Access to this data enables creditworthiness and identity checks to be carried out precisely and quickly with higher approval rates for existing and new customers.

Get more out of your payments with Mondu.

Managing invoices in-house or outsource? 

In the following list you will find all the arguments discussed. Decide for yourself whether a provider is worthwhile for your company or whether you would like to manage invoice payments in-house.

  Self management Outsourcing

+ Full control and direct contact with customers

– Involves a third party in the customer relationship

+ Choosing an experienced provider to manage the task professionally

+ Control and visibility through a dashboard that gives you access to the invoice management process


– Manpower required for the credit and risk checks as well as collection and dunning

+ Risk and credit are handled by experts. This leads to faster and higher approvals

+ Handing over collection and dunning


– Limited data makes it difficult to perform own checks on creditworthiness

– Costs of bad debts / payment defaults

+ Provider is an expert in running checks

+ Provider takes on the default risk

+ Upfront payment by the provider


+ No processing fees

– Dedicated staff for debtor management and in particular for collection and dunning

– Possible fees incurred by the merchants

+ Some fees can be passed on to the buyer

+ Saving of internal manpower

Overall, we can say that it makes sense for most B2B merchants and marketplaces to outsource the processes for invoice payments to a service provider, as it saves the teams a lot of time and effort as well as the immense risk of payment defaults.

Content & SEO Manager

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