Best Ways to Clear B2B Electronic Invoices Online

 |  Apr 17, 2018

Best Ways to Clear B2B Electronic Invoices Online

Digital payments and electronic invoices are all the hype today, but for all the right reasons. They are more convenient and manageable than cash and paper-based invoices. They also allow you to do accept accounts receivable (AR) from your foreign corporate clients with ease.   

According to Statista, the total transaction value of digital payments in India is expected to show an annual growth rate (CAGR 2018-2022) of 17.4 % resulting in the total amount of USD 98,309 million in 2022. In other words- online payments are the need of the hour for your business. But how do you go about it?

First and foremost, you need to identify the top online payment methods that are preferred by most entities for their invoicing services. These are:

  • Credit/Debit Card
  • Net banking
  • Mobile Wallets
  • UPI

The first two, i.e. cards and net banking are two of the oldest online payment methods and thus widely used by most corporates for their accounts payable. Mobile wallets and UPI are relatively new and thus used by a smaller group of corporates. The same goes for e Collect and NACH even though they offer automated accounting system and AR-oriented payment support for the electronic invoices as well as paper invoices. That said, you still want to cover all kinds of payment methods so that there is no excuse for a high DSO ratio or a poor accounts receivable management.

If you are using a debt collection software, then it should make it easier for you to set up the multiple payments option without affecting the invoicing and privacy policy. However, you still need to learn about a few things to accept online payments. These are:

Merchant Accounts

In order to accept online payments, you need to have a merchant account. Only then you can receive payments from your clients or transfer the funds to them in case of refunds.

All the payments are credited/debited to/from your merchant account. However, when you want, you can easily transfer the money from it to your primary/personal bank account. The only problem is that creating and managing a merchant account on your own, especially when you don’t have a dedicated accounting system, can be a daunting task. This is where payment gateway comes in.  

Payment Gateway

A payment gateway is a technology that connects merchants with the payment networks. Just like you use a Point of Sale (PoS) terminal at a physical brick-and-mortar store for your customers, you need to use a payment gateway to accept and process the structured invoicing data issued.

If you want to accept electronic invoices payments from credit cards, debit cards, mobile wallets, and even net banking, then you need a payment gateway. However, you don’t really need it for UPI as it allows the transfer of funds without having to share bank account details, as it replaces this information with a single alias (kind of like how PayPal works with email addresses) following its select electronic data interchange standards.  

Now, the traditional payment methods for both digital as well as paper invoices discussed above are good by all means and can be used with a payment gateway. However, you can still take one step further to enjoy even more invoicing software benefits including faster disbursals through payment and invoicing process automation, dispute management, etc. These are possible with options like NACH and eCollect:


NACH, i.e. National Automated Clearing House is a centralized and online payments solution that processes the transactions across businesses, government offices, and banks as per the electronic data interchange edi. It’s the primary method used for high volume transactions such as salary disbursals, loan payments, bill payments, etc.

NACH payments system is managed by the National Payment Corporation of India (NPCI) under as per the regulations of the central bank RBI. It can be used via NACH Credit and NACH Debit which are two main services under NACH that allow for easy acceptance and transfer of funds from corporate accounts easily and conveniently.

These come with many useful features such as:

  • Online dispute system
  • High efficiency of handling 10 million transactions a day
  • NACK or ACK system for tracking and monitoring the payments
  • Batch payments for any structured invoice data issued
  • Excellent support for corporate payments in a safe and secure environment, especially when using an enterprise-level invoicing software


eCollect offers a payments solution for recurring invoices and accounts receivable, thereby making monthly billing easier and simpler. It automates the entire process through email updates and reports, which eliminates the traditional methods in which you had to manually send an invoice and then wait for the payment to be cleared.

eCollect Features:

  • Automated billing replacing traditional paper-based and manual billing
  • Easier accounting and reconciliation
  • Recurring payments management

Now that you know about some of the best payment methods for managing your accounts receivables, you must be wondering “how to pick one?”

Picking a Payment System for Electronic Invoices

Thanks to the increased digital payments and acceptance of electronic invoices in India, there is no dearth of payment gateways like CCAvenue, EBS, Citrus Pay, etc. and other payment systems. However, you must pick one for yourself with care. This is because you want to make the invoicing services and payments easy for yourself as well as your corporate clients for top-level accounting system. You also don’t want to pay a higher transaction fee than necessary.

The following are some of the main factors to consider when comparing different payment gateways:

  1. Pricing and Fee

Since you will be accepting the majority of your payments for your electronic invoices online, i.e. through an online payment system, the transaction charges it offers should be one of the main factors to influence your decision. Even though a difference of 1% or 2% in the transaction fee may not sound much, in the long run, it can greatly affect your cash flow.

  1. Payment Swiftness

Late payments are detrimental towards the invoicing process on their own, but when the delay is on the payment system’s part, then the situation worsens. So, you should look for a product that allows for a seamless transfer of funds in the shortest period of time possible but not at the cost or unreliable electronic data interchange edi.

If you are accepting payments from clients from other countries, then the timing is especially important because some payment systems take as many as 3-4 days for international payments.  In fact, it can vary widely and bring inconsistency in your cash flow.

  1. Payment Options

A payment system may not necessarily support all types of payment methods such as net banking, mobile wallets, etc. However, you must choose one that offers as many options for your payment and accounting system.

  1. Interface

Your corporate clients should be able to understand and use the payment system without any problems. In that enterprise, the interface, design, and the cloud-based support play a huge role. So, be sure to look into it as well when you compare your options.

By establishing a reliable and user-friendly electronic invoice and payment system, you can ensure that your corporate clients get the option to clear the accounts payable pipeline as quickly as possible. You can also track and record the payments with accuracy this way, and take care of reconciliation easily when the time comes. The advantages are countless, really.



Getting paid was endless and many a times embarrassing series of follow-ups. With numberz it begins with a click and ends with a click! Sraboni Harlalka Partner at Wodehouse Capital

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