B2B Payments For Manufacturers & Distributors: The Definitive Guide

Welcome to our comprehensive guide on B2B Payments, designed specifically for manufacturers and wholesale distributors.

In this guide, we explore the modernization of B2B payments, from moving off legacy systems like checks and manual ACH to adopting modern digital options such as real-time payments, virtual cards, and embedded solutions. You’ll discover the challenges of outdated processes, the opportunities presented by new technologies, and the tangible benefits modernization delivers for both manufacturers and distributors.

Whether you’re leading finance, operations, or digital strategy, this guide will help you understand how modern B2B payment solutions can streamline operations, strengthen customer relationships, and unlock new growth opportunities.

1. Introduction: Why B2B Payments Are at a Crossroads

In manufacturing and distribution, payments have long been the quiet, overlooked part of the business. Orders get fulfilled, invoices go out, checks come back, and the finance team reconciles it all — often with a mix of spreadsheets, manual data entry, and ERP workarounds. For decades, this process worked “well enough.”

But the landscape has changed. Manufacturers and distributors now operate in an environment where:

• Customers expect speed and self-service. They don’t want to wait weeks for invoices to clear or deal with paper checks.
  
• Margins are under constant pressure. Every unnecessary cost, whether in order entry, collections, or reconciliation, eats away at profitability.
  
• Digital-first competitors are raising the bar. Companies that build payments into their eCommerce platforms or offer real-time settlement create frictionless buying experiences that traditional players struggle to match.

This is why B2B payments are at a crossroads. The legacy systems and processes that once served the industry are no longer enough to compete. Moving to modern, digital payment solutions isn’t just about convenience, it’s about protecting margin, strengthening customer loyalty, and building a foundation for future growth.

For manufacturers and distributors, modernizing payments offers more than faster transactions. It’s a chance to integrate finance directly into the digital customer journey, unlock better visibility into cash flow, and reduce the manual work that slows teams down.

As the rest of this article will show, payment modernization is no longer a back-office initiative. It’s a strategic lever, one that forward-thinking manufacturers and distributors are using to transform customer experience, improve efficiency, and stay ahead of competitors.

2. The Current State of B2B Payments in Manufacturing and Distribution

When you look at how most manufacturers and distributors handle payments today, it’s clear the industry is still living in the past. Despite massive digital investments in areas like eCommerce, product content, and supply chain visibility, payments often remain the least modernized part of the business.

Why B2B Lags Behind Consumer Payments

In the consumer world, digital wallets, real-time settlement, and one-click checkout have become the norm. B2B payments, by contrast, are still dominated by:

• Paper checks (still representing nearly 40% of B2B transactions in North America).
  
• ACH transfers that can take days to clear.
  
• Manual credit card processing with high fees and reconciliation challenges.
  
• ERP-native processes that were designed decades ago and rarely integrate seamlessly with eCommerce.
  

This isn’t just an IT problem, it’s a structural one. Manufacturing and distribution involve multiple stakeholders, large order values, complex terms, and long-standing customer habits. Unlike a consumer checkout, a B2B payment often comes at the end of a chain involving quotes, POs, negotiated pricing, credit checks, and multiple invoices.

Common Inefficiencies in B2B Payments

Manufacturers and distributors face recurring challenges that drag down performance:

• Late payments driven by manual invoicing, mailing delays, and lengthy approval chains.
  
• High administrative costs as finance teams spend hours reconciling payments against invoices.
  
• Lack of visibility into cash flow because payments are processed across multiple channels with limited real-time reporting.
  
• Customer friction when buyers are forced to pay through outdated systems that don’t match their digital expectations.
  

The Business Impact

These inefficiencies aren’t minor annoyances. They ripple across the organization:

• Working capital is locked up when receivables take too long to clear.
  
• Sales and finance teams lose productivity chasing down payments instead of focusing on value-added tasks.
  
• Customer relationships suffer when buyers see outdated payment processes as slow or inconvenient compared to digital-first competitors.
  
• Margin pressure increases as the cost-to-serve rises with every manual process.

For many manufacturers and distributors, payments have quietly become one of the biggest friction points in the customer journey. And in a competitive market, where buyers can easily switch to suppliers offering a smoother experience, this friction can quickly become a growth limiter.

That’s why leading companies are now treating B2B payments not as an accounting function, but as a strategic capability that requires modernization.

3. Modernizing B2B Payments: Moving Beyond Legacy Systems

For decades, payments in manufacturing and distribution have been treated as a back-office process — disconnected from customer experience and siloed inside finance teams. That mindset is changing. Modernizing payments is no longer just about automating invoices. It’s about reshaping how money moves across the supply chain to unlock efficiency, speed, and better customer relationships.

Key Drivers of Payment Modernization

Several forces are pushing manufacturers and distributors to rethink how they handle payments:

• Customer expectations: Buyers accustomed to real-time consumer payment tools expect similar ease when transacting with suppliers.
  
• Margin pressure: Manual processes inflate cost-to-serve, which eats away at already thin margins.
  
• Digital-first competitors: Marketplaces and digital-native distributors are setting new standards with embedded payments and instant settlement.
  
• Finance visibility: Leadership teams want real-time cash flow insights for better forecasting and risk management.
  

In short, the payment process is no longer “back office.” It’s part of the customer experience — and a strategic lever for growth and profitability.

The Role of ERP and eCommerce Integration

One of the biggest hurdles to payment modernization is the reliance on legacy ERP systems. Many of these systems were not designed with modern payment methods in mind, making integration a challenge. But the upside is significant:

• When payments are embedded directly into eCommerce portals, customers can transact in the same place they research products, submit quotes, and place orders.
  
• Integrated payments create a single source of truth between finance, sales, and operations, reducing errors and manual reconciliation.
  
• Automation across invoice generation, approvals, and settlement frees finance teams from repetitive work.
  

Payment Digitization as Part of Digital Transformation

It’s tempting to think of payments as separate from larger digital initiatives. But in practice, payment modernization is part of the broader digital transformation journey. Just as manufacturers and distributors are modernizing product content, customer portals, and supply chain visibility, payments must also evolve.

Modernizing payments helps companies:

• Shorten the cash conversion cycle by accelerating collections.
  
• Reduce reliance on paper-based processes that slow operations.
  
• Enhance customer trust by offering reliable, secure, and easy-to-use payment options.
  

When viewed through this lens, payment modernization is not a “finance project.” It’s a cross-functional initiative that touches sales, customer service, operations, and leadership — making it central to long-term competitiveness.

4. Modern B2B Payment Options and Models

The shift away from legacy processes isn’t just about eliminating checks and manual ACH files. Manufacturers and distributors today have access to a wide range of modern payment options designed to make transactions faster, more secure, and more customer-friendly.

Virtual Cards

Virtual cards offer a secure, single-use credit card number for each transaction. They:

• Reduce fraud risk by eliminating reuse.
  
• Simplify reconciliation with unique identifiers tied to each payment.
  
• Allow suppliers to get paid faster than waiting for checks or ACH.
  

For distributors dealing with thousands of invoices monthly, this level of automation helps finance teams save hours of manual work.

Real-Time Payments (RTP)

Real-time payment networks are gaining traction, particularly for time-sensitive orders where delivery depends on immediate settlement. Benefits include:

• Instant clearing and settlement, improving cash flow.
  
• Reduced payment uncertainty for urgent, high-value transactions.
  
• Customer satisfaction from immediate order confirmation.
  

This is especially valuable in industries where contractors, hospitals, or restaurants can’t wait days for supply replenishment.

Digital Wallets and Embedded Payments

In B2B eCommerce portals, digital wallets are beginning to replace traditional invoicing flows. These enable customers to store payment credentials and pay directly inside the portal, no separate process required.

• For manufacturers: Digital wallets help standardize global transactions.
  
• For distributors: They enable frictionless reorders, encouraging repeat purchases.
  

Embedded payments extend this concept further by integrating payment functionality directly into the buying workflow. For example:

• A contractor places an order on a distributor’s eCommerce portal.
  
• Payment authorization occurs instantly, tied to customer-specific credit terms.
  
• The system auto-updates ERP and accounts receivable in real time.
  

Automated Invoice-to-Pay Solutions

These platforms digitize the full lifecycle from invoice creation to reconciliation. They:

• Match invoices automatically against purchase orders.
  
• Trigger payment approvals via configurable workflows.
  
• Update ERP systems without manual intervention.
  

This reduces disputes, cuts administrative burden, and creates a smoother experience for both customers and finance teams.

Cross-Border Payment Solutions

Global supply chains require payments across currencies and jurisdictions. Modern solutions in this space focus on:

• Currency conversion transparency with upfront rates.
  
• Lower transaction fees than traditional banks.
  
• Improved tracking for compliance and audit purposes.
  

This is increasingly important for manufacturers sourcing raw materials internationally or distributors serving multinational customers.

5. Benefits of Modern Payments for Manufacturers and Distributors

Moving away from paper checks and legacy processes isn’t just about keeping up with technology trends. For manufacturers and distributors, modern payment solutions directly impact efficiency, customer experience, and profitability.

Faster Cash Flow and Improved Working Capital

Delayed payments have long been a pain point in manufacturing and distribution. With real-time payments, virtual cards, or automated invoice-to-pay systems:

• Manufacturers shorten their receivables cycle, improving liquidity for production and sourcing.
  
• Distributors get paid sooner, reducing the need for expensive credit lines and giving them more flexibility to manage inventory.
  

Reduced Manual Errors and Administrative Burden

Manual payment processes require staff to key in invoices, chase approvals, and reconcile transactions. Modern payment systems:

• Eliminate data re-entry by syncing directly with ERP and eCommerce platforms.
  
• Reduce disputes by automatically matching invoices with purchase orders.
  
• Free up finance teams to focus on strategic activities like forecasting and margin analysis.
  

Enhanced Customer Experience and Loyalty

In a competitive market, friction in payments can cost you customers. By offering multiple, digital-friendly options:

• Manufacturers become easier to do business with, strengthening relationships with distributors.
  
• Distributors can provide contractors, hospitals, or restaurants with self-service portals and instant payment confirmations, encouraging repeat business.
  

Lower Cost-to-Serve and Margin Protection

Every phone call to check invoice status or every manual reconciliation adds cost. Modern payment tools:

• Reduce the average cost per transaction.
  
• Minimize late payment penalties and collection costs.
  
• Allow sales and customer service reps to focus on revenue-generating activities instead of chasing payments.
  

Better Data Visibility for Forecasting and Financial Control

With payments integrated into ERP and digital platforms, finance leaders gain real-time insight into:

• Cash flow across regions and business units.
  
• Payment patterns that signal customer health or credit risk.
  
• Opportunities to negotiate better terms or optimize working capital.
  

This level of visibility turns payments from a back-office function into a strategic decision-making tool.

6. Challenges and Barriers to Adoption

While the benefits of modern payments are clear, manufacturers and distributors face significant hurdles when moving away from legacy systems. These barriers aren’t just technical,  they’re cultural, organizational, and customer-driven.

Legacy ERP and Integration Complexity

• Many ERPs used in manufacturing and distribution were designed decades ago, long before digital payments became standard.
  
• Integrating modern payment tools into these systems often requires custom development, middleware, or major upgrades.
  
• Finance teams worry about downtime or errors during transition, which can slow adoption.
  

Internal Resistance to Change

Change management is just as important as technology.

• Finance teams accustomed to manual processes may resist automation out of habit or fear of losing control.
  
• Sales reps sometimes discourage customers from using digital portals, preferring traditional relationships where they control the transaction.
  
• Executives may view payment modernization as a cost center rather than a growth lever.
  

This mirrors broader digital adoption challenges seen across B2B eCommerce.

Customer Adoption Barriers

Even when companies implement modern payment systems, getting customers to actually use them can be difficult.

• Longstanding habits like mailing checks are hard to break, especially for smaller contractors or regional buyers.
  
• Customers may worry about security when asked to store payment information digitally.
  
• Some buyers simply don’t see the benefit if legacy methods still “work.”
  

Security and Fraud Concerns

Any shift to digital payments raises questions around:

• Data privacy (PCI DSS and other compliance requirements).
  
• Fraud risk with online transactions.
  
• Trust in third-party payment providers.
  

Without strong communication and visible safeguards, these concerns can become deal-breakers for customers and finance leaders alike.

Cost and ROI Concerns

Finally, many manufacturers and distributors hesitate because of perceived costs:

• Licensing fees for payment platforms.
  
• Integration costs with ERP and eCommerce.
  
• Training and change management expenses.
  

Without a clear business case, these costs can overshadow the potential savings from automation and faster cash flow.

7. The Role of Payment Solution Providers in B2B

Manufacturers and distributors don’t have to modernize payments on their own. A growing ecosystem of solution providers is reshaping how money moves across supply chains. These providers bring technology, security, and integration expertise that help businesses transition from paper-based processes to digital-first models.

Categories of Solution Providers

1. FinTech Specialists
These are companies built to digitize and simplify B2B payments. They often offer:

• Virtual cards, automated accounts receivable/payable, and real-time payments.
  
• Cloud-native platforms that integrate with ERP and eCommerce systems.
  
• Analytics dashboards for visibility into cash flow and customer payment behavior.
  

Examples: Billtrust, Corpay, AvidXchange.

2. ERP-Native Payment Providers
Some payment solutions are built directly into leading ERP systems. These:

• Reduce integration complexity.
  
• Provide a seamless flow of data between invoicing, accounts receivable, and reconciliation.
  
• Are attractive to finance teams wary of third-party complexity.
  

Examples: Oracle NetSuite Payments, SAP Ariba Pay, Microsoft Dynamics integrations.

3. Bank and Treasury Partners
Traditional banks remain significant players in B2B payments, particularly for:

• Corporate card programs.
  
• Cross-border transactions.
  
• Treasury management services for large manufacturers and distributors.
  

Banks are increasingly partnering with FinTechs to deliver modern experiences without sacrificing compliance or trust.

4. Payment Gateways and eCommerce Platforms
As distributors and manufacturers expand their digital storefronts, payment gateways integrated into eCommerce platforms play a larger role. These providers:

• Enable embedded payments inside B2B portals.
  
• Offer secure checkout experiences similar to consumer eCommerce.
  
• Support recurring billing, credit terms, and stored payment methods for repeat buyers.
  

Examples: Stripe, Adyen, PayPal Braintree (all adapting solutions for B2B use cases).

What to Look For in a Payment Partner

When evaluating providers, manufacturers and distributors should prioritize:

• ERP and eCommerce integration — Does it connect with existing systems without heavy customization?
  
• Scalability: Can it handle complex terms, multiple regions, and high transaction volumes?
  
• Security and compliance: Is it PCI DSS compliant, and how does it handle fraud prevention?
  
• Customer adoption features: Does it offer user-friendly portals, mobile options, and clear onboarding support?
  
• Analytics and reporting: Does it provide real-time visibility into cash flow and payment trends?
  

Case Examples in Action

• A distributor uses a FinTech platform to shift 70% of customers from check to digital payments, reducing DSO (days sales outstanding) by 10 days.
  
• A manufacturer integrates ERP-native payments into its order system, cutting reconciliation time from days to hours.
  
• A mid-market supplier embeds payments in its eCommerce portal, boosting repeat orders by making checkout seamless.

8. B2B Payment Providers to Watch

While categories of providers give manufacturers and distributors a framework to evaluate options, it’s helpful to look at some leading players and what they specialize in. Below are examples of solution providers shaping the future of B2B payments.

TreviPay

TreviPay is a global B2B payments and invoicing network that specializes in extending trade credit and managing accounts receivable for manufacturers, distributors, and marketplaces. Key capabilities include:

• Custom trade credit programs: Extending net terms to customers without tying up internal capital.
  
• Automated invoicing and reconciliation: Reducing administrative work for finance teams.
  
• Global support: Enabling cross-border trade with localized compliance and payment capabilities.
  
• Embedded payments: Integrating credit and payment options directly into eCommerce portals, creating a seamless checkout experience.
  

TreviPay is particularly strong for companies that want to offer flexible credit terms to customers while reducing risk and administrative burden.

9. Strategic Considerations for Manufacturers and Distributors

Modernizing payments isn’t a plug-and-play exercise. For manufacturers and distributors, success depends on aligning technology with strategy, managing internal adoption, and ensuring customers actually use the new systems.

Aligning Payment Strategy with Digital Commerce

Payment modernization should not be treated as a separate finance project. Instead, it must connect directly to the broader digital strategy:

• For manufacturers: Payments should be tightly integrated into ERP and order management systems to reduce reconciliation work and improve visibility.
  
• For distributors: Embedding payments into eCommerce portals enhances the end-to-end buying journey, encouraging repeat orders and customer loyalty.
  

When aligned with digital commerce, payments become part of a seamless experience rather than a back-office afterthought.

Internal Adoption and Change Management

As highlighted in the Customer Adoption Framework, internal adoption is just as critical as external adoption.

• Finance teams need training to trust automation and use analytics tools effectively.
  
• Sales reps must see digital payments not as a threat to relationships, but as a way to free up time for higher-value interactions.
  
• Executives should position payments as a strategic lever, a growth engine that protects margin and reduces risk.
  

Without intentional change management, even the best technology fails to deliver results.

Building Trust and Adoption with Customers

Customer adoption is often the hardest part. To encourage use of digital payment tools, companies should:

• Communicate benefits clearly (faster confirmation, fewer disputes, multiple payment options).
  
• Provide support and training for customers less familiar with digital tools.
  
• Phase the rollout to focus first on large accounts or frequent buyers who will see immediate value.
  
• Incentivize adoption with early-payment discounts, loyalty rewards, or simplified credit terms for customers who use digital options.
  

When customers adopt modern payment tools, they experience fewer delays and more transparency and they associate those benefits with the manufacturer or distributor who provided them.

Measuring Success

To keep payment modernization on track, companies should define KPIs such as:

• Reduction in days sales outstanding (DSO).
  
• Percentage of payments made through digital channels vs. paper checks.
  
• Error rate reduction in reconciliation.
  
• Customer satisfaction scores tied to billing and payments.
  

Tracking these metrics ensures the initiative delivers measurable business value, not just new technology.

10. Looking Ahead: The Future of B2B Payments

The modernization of B2B payments is only beginning. Over the next decade, manufacturers and distributors will see payments evolve from a transactional necessity into a strategic differentiator that drives efficiency, customer loyalty, and competitive advantage.

Real-Time Payments and Instant Settlement

As real-time payment networks expand, same-day or instant settlement will become the standard. This shift will:

• Improve cash flow management for both manufacturers and distributors.
  
• Enable faster order fulfillment by linking payment confirmation to inventory release.
  
• Reduce the need for short-term credit or costly financing options.
  

AI and Automation in Accounts Payable/Receivable

Artificial intelligence is beginning to transform financial operations. Expect to see:

• Automated invoice matching and exception handling.
  
• Predictive analytics to identify late-payment risks before they happen.
  
• Smart recommendations for optimizing working capital (e.g., when to offer discounts or extend terms).
  

Blockchain and Supply Chain Finance Innovations

While still early, blockchain has the potential to streamline payments across global supply chains by:

• Creating transparent, immutable transaction records.
  
• Supporting smart contracts that automatically trigger payments once terms are met.
  
• Reducing reliance on intermediaries for cross-border transactions.
  

In parallel, supply chain finance tools will become more accessible, allowing distributors to get paid faster while manufacturers maintain flexible credit terms with customers.

From Cost Center to Growth Enabler

The biggest shift will be in mindset. Payments will no longer be viewed as a cost of doing business. Instead, they will become:

• A margin lever by lowering cost-to-serve.
  
• A loyalty driver by offering customers a smoother, more reliable experience.
  
• A growth enabler by integrating payments into digital commerce strategies and unlocking new financing opportunities.
  

The Future in Focus

For manufacturers and distributors, the question is no longer if B2B payments will modernize, it’s how quickly they will move to take advantage. Companies that embrace real-time, digital-first solutions will strengthen customer relationships, protect margins, and stay ahead of both traditional and digital-native competitors.