The world of B2B payments and credit solution programs changes at a pace that feels almost instant. Sometimes, the ever-changing nature of this industry can make it hard to keep up, especially if you’re unfamiliar with terms or phrases. We’ve put together a comprehensive list of all the most commonly used terms in B2B payments to help you better understand the industry as a whole and how your business can benefit from integrating a payment experience into your tactics.
Credit as a Service®: Credit as a Service (CaaS) is a suite of applications and services that enable companies to access robust payment and credit solutions, sophisticated managed services and smart integrations to power global commerce.
InvoiceMe: An alternative payment tool within Credit as a Service that seamlessly integrates into an eCommerce site to extend terms at checkout.
Net30 Terms: An agreement between buyer and seller where the payment for the goods or services is due in full 30 days after the transaction has completed.
Omni-channel: A cross-channel shopping strategy that prioritizes user experiences. The most commonly used channels in an omni-channel strategy include eCommerce, brick-and-mortar locations, telesales, and social media.
API: An Application Programming Interface (API) is a communication protocol between a client and a server intended to simplify the building of client-side software. In terms of a B2B payments platform, an API is used to enable the systems belonging to the buyer, seller, and MSTS to effectively communicate with one another.
ERP: An Enterprise Resource Planning (ERP) is a software platform that manages the day-to-day activity of an organization such as purchasing, accounting, compliance, risk management, supply chain management, and project management.
CRM: Customer Relationship Management (CRM) is a software platform that manages all relationships and interactions for an organization’s current customers and potential customers.
A/R: Accounts Receivable (A/R) is the balance of money due to a business for goods or services that have been delivered but not yet paid for.
A/P: Accounts Payable (A/P) is the balance of money owed by a business to a supplier.
DSO: Days Sale Outstanding (DSO) is the average number of days it takes a company to collect payment once the sale has been made.
White label: White label is a feature of a product or service wherein one company produces said product or service and rebrands it in a way that allows other companies to apply their logos and brand guidelines.
Digital transformation: The application of newer and faster digital technologies to create new or alter business processes to better meet the changing needs of market requirements.
B2B2C: Business-to-Business-to-Consumer (B2B2C) is a model that allows a company to sell to another business as well as direct to the end customer.
D2C: Direct to Consumer (D2C) is a model that lets a manufacturer sell directly to the consumer.
Working capital: The money a business has available to use in its day-to-day operations.
Dynamic pricing controls: A feature within CaaS that can validate contract pricing by customer, to the SKU level, and across geographies.
ACH: An Automated Clearinghouse (ACH) is a digital network that facilitates payments in the U.S.
EFT: Electronic Funds Transfer (EFT) refers to the electronic transfer of money from one bank account to another, without using a paper check.
Cross-border payments: Money transactions that involve organizations, banks or individuals in at least two different countries.
Purchase controls: The practice of putting specified individuals in an organization in charge of making decisions around purchasing, which involves picking vendors, managing inventory, purchasing items or services, inspecting purchased items or services and tendering payments.
Purchase order: A document issued by a buyer to a seller that displays the type and amount of a specified product or service at an agreed-upon price.
Purchasing power: The number of goods or services that can be purchased based on the amount of money a business has available.
False positives: A false positive happens when an innocent transaction is flagged as suspicious by the fraud detection system, which is put into place to ensure theft does not occur. However, these systems can sometimes make mistakes. Credit cardholders can run into false positives when trying to purchase online and the transaction is denied due to the system marking the charge as potential theft, despite it being legitimate.
Machine learning: A branch of artificial intelligence wherein systems can learn from data, identify patterns and make decisions with little to no human interaction. In the payments space, machine learning is leveraged to learn about customer behavior and offer products or services to cater to those findings.
Trade credit: Used mostly in Europe, trade credit refers to the arrangement between a buyer and seller where the buyer can acquire goods or services on an account without having to pay immediately.
Purchasing experience: The entire process that a buyer goes through from inquiry to order on goods or services.
Back-office: The part of a business operation that focuses on the actual production of a product or service. Often, back-office tasks aren’t seen by customers and include activities such as planning, accounting, supply chain management, logistics, and inventory management.
POS: Point of Sale (POS) refers to the time and location where a retail transaction occurs. In eCommerce, the POS system brings the transaction, customer management, and inventory together in one central location.
Risk-free credit line: An amount of money available to an individual buyer that takes the risk of late or lack of payments off of the seller as the borrowed money does not come from the seller’s working capital. With CaaS, sellers can offer credit lines to buyers while MSTS absorbs the risk.
Closed-loop program: A line of credit that allows buyers to only shop from a specific seller.
Level 3 data: Level 3 data is a detailed set of information that correlates to the line item invoice details about the goods or services being purchased. This level of data is best for both buyer and seller as significantly more information is provided before the settlement and lends itself to optimal reporting for both parties.
Headless commerce: Headless commerce refers to rethinking the eCommerce platform as a collection of digital services that support commerce versus a sole solution for eCommerce on the web specifically. This involves separating out templating, presentation and interactive layers of the customer experience from order management, product information management systems, and payment acquisition. When these items are separated, it allows businesses to decouple development and put the focus on resources to better meet the needs of consumers without being concerned about the impact to critical systems of record like product databases or payment processing.
Business intelligence: Business intelligence (BI) encompasses the technologies organizations use for data analysis on a set of information. These technologies provide companies with historical, current and predictive views of operations. BI can also provide companies with powerful insights into the behaviors, trends, and preferences of consumers.
Replatforming: Moving eCommerce operations from one platform to another to better optimize the overall experience and performance.
Order to Cash: Order to Cash (O2C) refers to the process of receiving and fulfilling a customer’s request for goods or services.
Business Process Outsourcing: Business Process Outsourcing (BPO) is a practice where a company hires a different organization as an external service provider.
Share of wallet: The measurement used to calculate the percentage of a customer’s spending for a type of product or service that goes to a specific organization.
Cart abandonment: The act of adding items to a shopping cart during the online purchasing experience but leaving before the transaction is completed.