Communications of the acm

Cotteleer fig 3 (6/07)
1. Receives invoice from
Supplier
2. Writes and ships check to
Supplier
3. Manually enters data into
ERP system
1. Deposits check in Supplier
Bank
2. Reconciles payment with
invoice
3. Manually enters data into
ERP system
1. Credits Supplier bank
account
2. Ships check to Federal
Reserve or other check-
clearing entity
Buyer Business
Paper-Based Payment Environment
Electronic Payment Environment
Supplier Business
Supplier Bank
1. Sends purchase order
electronically
2. Receives invoice
electronically
3. Sends payment
electronically on desired
date
4. Transaction information is
automatically uploaded and
stored in local systems
5. Status of payments and
cash position are
transparent
1. Provides secure payment
environment
2. Automatically transfers
funds between accounts
1. Sends invoice electronically
2. Receives payment and
remittance data together for
improved reconciliation
3. Transaction data is
automatically uploaded and
stored in local systems
4. Status of payments can be
viewed for improved cash
management ability
5. Receivables may be financed
Buyer Business
E-Payment Provider
Supplier Business
1. Sorts Checks
2. Forwards check to
Buyer Bank
1. Debits Buyer bank account
2. Forwards processed check
to Buyer
1. Manually enters data 
into ERP system
Check Clearing Entity
Buyer Bank
Buyer Business
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
Continuous Exchange of Funds and Information
Stage 6
Figure 3. Life cycle of a B2B 
payment. 

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orientated businesses to conduct low-value nonrecur-
ring transactions, as in Table 2.