B2B payments, a world of their own
Businesses pay each other when the invoice falls due (30, 45 or 60 days), after checking and approval, not at the time of the order as in retail. That gap between order and settlement creates trade credit. French companies finance one another this way to the tune of about €700 billion, more than their outstanding short-term bank credit. Each day of delay strains the supplier's cash, and the supplier passes the delay on to its own suppliers. B2B payments are therefore as much about cash management as about payment processing.
- SCT credit transfer: the workhorse of B2B, carrying the overwhelming majority of invoice payments by value; now upgraded with instant payments and Verification of Payee (VoP).
- SEPA B2B direct debit (SDD B2B): a dedicated mandate and no refund right for the debtor; popular with creditors that bill on a recurring basis (rent, leasing).
- LCR (lettre de change relevé): a paperless bill of exchange that serves both as a payment instrument with a fixed due date and as an instrument banks can discount. A French specialty, in slow decline but still significant.
- B2B cards: lodged cards (business travel) and single-use virtual cards for online purchasing and procure-to-pay.
- Checks: in steady decline, kept alive by habit, costly to process and prone to fraud.
| Instrument | Initiated by | Deadline | Strengths | Drawbacks |
|---|---|---|---|---|
| SCT / SCT Inst credit transfer | debtor | whenever the payer chooses | universal, now instant and verified (VoP) | hard to reconcile without a reference |
| SDD B2B direct debit | creditor | scheduled | creditor controls collection, no 8-week refund | cumbersome mandate, businesses only |
| LCR | creditor (accepted by the debtor) | fixed due date | discountable, a financing instrument | aging system, declining use |
| B2B virtual card | debtor | immediate | fine-grained controls, rich data, security | MSC cost, supplier acceptance |
| Check | debtor | on receipt | habit | delays, fraud, manual processing |
France's 2026–2027 reform
France is rolling out mandatory e-invoicing between VAT-registered businesses (Ordinance 2021-1190, with the timetable revised by the 2024 Finance Act). Under the rule, no domestic B2B invoice may be sent as a PDF or on paper. Every invoice becomes a structured data file that travels through registered platforms, and the data flows automatically to the tax authority. The stated goals are to fight VAT fraud, estimated at €10 billion to €20 billion a year depending on the source, to pre-fill tax returns, and to deliver major productivity gains for businesses.
- E-invoicing: domestic B2B invoices between French taxable persons, sent in a structured format through an approved platform, with lifecycle statuses (submitted, rejected, refused, collected…).
- Transaction e-reporting: data on B2C and cross-border sales (exports, intra-EU), sent to the tax authority on a periodic schedule.
- Payment e-reporting: for services, businesses report payment receipt data (date, amount), because VAT on services becomes due when payment is received. This is the official link between invoice and payment.
- New mandatory invoice fields: the customer's SIREN (French company ID number), the delivery address, the type of transaction (goods or services), and whether the supplier has opted to pay VAT on invoicing rather than on receipt.
Approved platforms, formats and invoice flows
An approved platform (PA, called a PDP until the Finance Act for 2026) is a private operator registered by the tax authority, first provisionally and then permanently after audits. It forwards invoices to the recipient's platform and extracts the tax data for the data hub. It manages lifecycle statuses and guarantees authenticity, integrity and legibility. The approved-platform market brings together long-established e-invoicing software vendors, ERP providers, online accounting firms and telecom operators: more than a hundred registered firms, with consolidation expected.
- Factur-X: a Franco-German hybrid format, a human-readable PDF with embedded structured XML (CII syntax); SMEs favor it because people can still read it.
- UBL and CII: the core formats that are 100% XML, aligned with the European semantic standard EN 16931; favored by large enterprises and for automated exchanges.
- Peppol: an international interoperability network, expected to become the exchange layer between approved platforms and for EU-wide e-invoicing (ViDA).
<rsm:ExchangedDocument>
<ram:ID>INV-2026-0912</ram:ID>
<ram:TypeCode>380</ram:TypeCode>
<ram:IssueDateTime>
<udt:DateTimeString format="102">20260709</udt:DateTimeString>
</ram:IssueDateTime>
</rsm:ExchangedDocument>
<ram:ApplicableHeaderTradeSettlement>
<ram:PaymentReference>RF18539007547034</ram:PaymentReference>
<ram:InvoiceCurrencyCode>EUR</ram:InvoiceCurrencyCode>
<ram:SpecifiedTradeSettlementPaymentMeans>
<ram:TypeCode>30</ram:TypeCode>
<ram:PayeePartyCreditorFinancialAccount>
<ram:IBANID>FR7630001007941234567890185</ram:IBANID>
</ram:PayeePartyCreditorFinancialAccount>
</ram:SpecifiedTradeSettlementPaymentMeans>
<ram:SpecifiedTradePaymentTerms>
<ram:DueDateDateTime>
<udt:DateTimeString format="102">20260908</udt:DateTimeString>
</ram:DueDateDateTime>
</ram:SpecifiedTradePaymentTerms>
</ram:ApplicableHeaderTradeSettlement>Financing receivables: factoring, Dailly assignment and discounting
Because B2B invoices are paid at maturity, receivables stay tied up until the agreed payment date. Several financing techniques let a company unlock them, by selling or pledging invoices to get cash immediately, at a discount that pays the financier. France is the largest factoring market in the European Union, with more than €400 billion in receivables purchased each year (ASF). E-invoicing will reshape this market. Structured, authenticated and timestamped invoices are easier to finance because the risk of document fraud is lower.
DSO (days sales outstanding) measures how many days of sales are tied up in customer receivables. As a first approximation, it equals trade receivables divided by sales including VAT, multiplied by 365. For a company with €100 million in sales, cutting DSO by 5 days frees up about €1.4 million in cash, without borrowing a single euro. Companies use four levers, from most to least effective. The first is to invoice quickly and accurately, which e-invoicing delivers. Next come early, systematic dunning, then frictionless payment methods such as pre-filled credit transfers or Request-to-Pay. Financing whatever remains comes last.
Reconciling invoices and payments
Reconciliation, matching the cash received in the bank account with the invoice it pays, has always been the weak point of B2B processing. A credit transfer lands in the account without saying which of 4,000 customers sent it, or which invoices it covers. Several things make identification harder: truncated remittance information, bulk payments that settle twelve invoices in a single transfer, unilateral deductions, and deposits. Cash application keeps entire accounting teams busy. The fix is to carry a structured reference from the invoice to the credit transfer, and then from the transfer to the accounting entry. E-invoicing and ISO 20022 make it possible to do that at scale.
- RF reference (ISO 11649): a self-checking creditor reference (with built-in check digits), carried in the structured remittance field of the SEPA credit transfer; the standard for referenced credit transfers.
- Structured RemittanceInformation (ISO 20022): the pain.001 (payment instruction) and the camt.054 (credit notification) can carry the numbers of the invoices being paid, so cash application becomes a simple key match.
- Pre-filled credit transfer: the “pay” button on an e-invoice initiates a credit transfer (open banking / PIS) with the IBAN, amount and reference already filled in. No typing errors, no unidentified transfers.
- AI-assisted reconciliation: for what is left (payers who send no reference), matching engines learn each customer's payment habits (typical short payments, grouped payments).
<CdtTrfTxInf>
<Amt><InstdAmt Ccy="EUR">12480.00</InstdAmt></Amt>
<Cdtr><Nm>Industrial Supplier SAS</Nm></Cdtr>
<CdtrAcct><Id><IBAN>FR7630001007941234567890185</IBAN></Id></CdtrAcct>
<RmtInf>
<Strd>
<CdtrRefInf>
<Tp><CdOrPrtry><Cd>SCOR</Cd></CdOrPrtry></Tp>
<Ref>RF18539007547034</Ref>
</CdtrRefInf>
<RfrdDocInf>
<Nb>INV-2026-0912</Nb>
<RltdDt>2026-07-09</RltdDt>
</RfrdDocInf>
</Strd>
</RmtInf>
</CdtTrfTxInf>Request-to-Pay and the future of B2B settlement
Request-to-Pay (RTP) is the mechanism a creditor uses to send its debtor a payment request before the debtor pays. The SEPA Request-to-Pay scheme (SRTP, launched by the EPC in June 2021) standardizes how this payment request travels from the creditor to the payer through their respective providers. The payer receives the request in its banking app and accepts it, either immediately or on the due date, without re-entering the amount or any bank details. The payment then goes out as a credit transfer, ideally an instant one. RTP is a messaging layer that precedes and triggers the transfer; it is not a payment method in itself. The request carries the invoice reference, the transfer passes it back, and reconciliation happens without manual work.
- B2B use cases: invoices with a “pay” button, payment schedules approved once and then executed automatically, and dunning reminders that carry a payment request the customer can act on.
- Related B2C use cases: energy and telecom bills, rent, tolls, anywhere direct debit is unpopular and cards are expensive.
- Main obstacle: bank adoption of the SRTP scheme remains patchy; private players (invoicing fintechs, approved platforms) fill the gap with proprietary RTP via email or ERP.
By 2030, the EU's ViDA package will extend structured e-invoicing to intra-EU transactions. Invoice data will continuously feed VAT returns, credit scoring and invoice financing. B2B payments were modernized later than retail payments, and they are now the industry's most profitable area of transformation. Every step removed between issuing the invoice and executing the transfer shows up directly in DSO, and therefore in available cash.
Elsewhere in the world. The same mechanism, elsewhere.
Mandatory structured e-invoicing between businesses, and the chosen tax-control architecture
Since January 1, 2019, every invoice between taxable persons resident or established in Italy has had to be electronic and go through the Sistema di Interscambio (SdI) run by the Agenzia delle Entrate, the Italian tax agency. An invoice that has not gone through the SdI is deemed not to have been issued. The requirement covers both B2B transactions and sales to consumers.
Agenzia delle Entrate, “La fattura elettronica” — https://www.agenziaentrate.gov.it/portale/aree-tematiche/fatturazione-elettronica/guida-fatturazione-elettronica/la-fattura-elettronica
Ajuste SINIEF 07/05 created Brazil's Nota Fiscal Eletrônica (NF-e). The document is legally valid only once the issuer has signed it digitally and the state tax authority (SEFAZ) has granted an “authorization of use” before the taxable transaction takes place. The issuer must send the buyer the NF-e file and its authorization record as soon as it receives them. Control is therefore upfront, transaction by transaction.
CONFAZ, Ajuste SINIEF 7/05 — https://www.confaz.fazenda.gov.br/legislacao/ajustes/2005/AJ007_05
In Mexico, an invoice exists for tax purposes only once it has been “stamped” (certified) by the SAT, the tax authority, or by a Proveedor Autorizado de Certificación (PAC), a licensed private operator and the functional equivalent of France's approved platforms (formerly PDPs). CFDI version 4.0 took effect on January 1, 2022, and has been the only valid version since its coexistence with version 3.3 ended on March 31, 2023.
SAT, “Servicio de facturación CFDI versión 4.0” — https://www.sat.gob.mx/aplicacion/75169/servicio-de-facturacion-cfdi-version-4.0-(vigente-a-partir-del-1-de-enero-de-2022)
In India, under the GST regime, businesses with aggregate annual turnover of ₹5 crore or more have had to register their B2B invoices on an Invoice Registration Portal (IRP) since August 1, 2023 (GST Notification 10/2023). The IRP returns an Invoice Reference Number (IRN) and a QR code, which are printed on the invoice.
GSTN, Invoice Registration Portal — https://einvoice6.gst.gov.in/content/einvoice-mandate/
In Poland, issuing invoices through the Krajowy System e-Faktur (KSeF) becomes mandatory on February 1, 2026, for companies whose 2024 sales, including VAT, exceeded 200 million zlotys, and on April 1, 2026, for all others, including VAT-exempt taxable persons. The obligation to receive invoices through KSeF, however, applies to everyone from February 1, 2026.
Ministerstwo Finansów, KSeF portal — https://ksef.podatki.gov.pl/informacje-ogolne-ksef-20/podstawy-prawne-oraz-kluczowe-terminy/
Statutory limits on B2B payment terms, and penalties for late payment
Directive 2011/7/EU sets a maximum of 60 calendar days for payment terms agreed between businesses, unless expressly agreed otherwise and not grossly unfair to the creditor, and 30 days for public authorities (60 days in exceptional cases). Any late payment automatically entitles the creditor to a minimum flat fee of €40 for recovery costs, on top of interest.
Directive 2011/7/EU, Arts. 3, 4 and 6 — https://eur-lex.europa.eu/legal-content/FR/TXT/?uri=CELEX%3A32011L0007
In the UK, no statutory cap limits the payment terms businesses agree between themselves; the law works through the cost of paying late. The Late Payment of Commercial Debts (Interest) Act 1998 entitles the creditor to statutory interest of 8% above the Bank of England base rate, plus fixed debt recovery costs of £40 for debts under £1,000, £70 for debts of £1,000 to £10,000, and £100 above that.
GOV.UK, “Late commercial payments: claim debt recovery costs” — https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs
In India, the MSMED Act 2006 specifically protects micro and small enterprises: the buyer must pay within the agreed period, which can never exceed 45 days (Section 15). Otherwise, the buyer owes compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India (Section 16).
Micro, Small and Medium Enterprises Development Act, 2006, Sections 15 and 16 — https://www.indiacode.nic.in/bitstream/123456789/2013/3/A2006-27.pdf
In the US, no federal cap limits the payment terms agreed between private businesses; the obligation applies only to the government. FAR clause 52.232-25 (Prompt Payment) requires federal agencies to pay by the 30th day after receiving a proper invoice or accepting the goods or services, and interest penalties are paid automatically, without the supplier having to ask (5 CFR Part 1315). The deadline drops to 7 days for meat and 10 days for dairy and perishable products.
Federal Acquisition Regulation 52.232-25 — https://www.acquisition.gov/far/52.232-25