B2B (Business-to-Business)
B2B (business-to-business) describes commercial relationships between companies – for example manufacturers selling to retailers or wholesalers to resellers – as opposed to selling to end consumers.
B2B (business-to-business) describes commercial relationships in which one company sells goods or services to another company – not to private end consumers. Typical constellations are manufacturers supplying wholesalers or specialist retailers, wholesalers supplying retailers, or suppliers selling components to manufacturing businesses. The buyer uses the goods further: for resale, for processing, or as operating resources.
B2B is characterised by long-term business relationships, customer-specific prices and terms, larger order volumes, purchase on account with a payment term, and multi-stage approval and procurement processes. These traits clearly distinguish B2B from the end-customer business (B2C) and place particular demands on ERP systems, which have to map pricing, creditworthiness and fulfilment.
At a glance
- Trade between companies rather than to end consumers
- Customer-specific prices, volume discount tiers and framework agreements
- Purchase on account with a payment term instead of immediate payment
- Higher volumes, longer sales cycles, multiple decision-makers
- Net price display (plus VAT) and e-invoicing as the standard
What characterises B2B (business-to-business)?
In B2B the buyer is a company that makes its purchasing decision rationally and process-driven. Unlike in the end-customer business, a spontaneous, emotional purchase decision is rarely the focus; instead there is a defined need, a budget and often a formal procurement process with offer comparison, approvals and contract design. Several roles are often involved in the purchase – for example purchasing, the specialist department and management.
Customer-specific terms are another hallmark: two customers pay different prices for the same item, depending on the framework agreement, order quantity, customer segment or negotiated discount tier. Instead of cash payment, purchase on account dominates, with a payment term (e.g. 30 days net) and cash discount. Orders reach higher amounts and quantities, and the business relationship is designed for recurrence and reordering.
Net prices and VAT
In B2B, prices are usually shown net (plus VAT), because the commercial buyer is entitled to deduct input tax. For cross-border transactions within the EU, the reverse-charge procedure applies as well, stating the VAT ID of both parties – a point that the ERP system has to control correctly when issuing invoices.
How does the B2B sales process work?
The typical B2B flow is multi-stage and documented. It starts with an enquiry or a lead, followed by an individual quote. After negotiation and order placement, an order confirmation is created, followed by a delivery note, goods issue and invoice. This order-to-cash process is more formalised in B2B than in the end-customer business, because terms, delivery dates and payment conditions are fixed contractually.
Pricing and creditworthiness play a central role. Customer-specific price lists, volume-tiered prices and project-related special terms have to apply automatically. Before delivery on account, creditworthiness is often checked and a credit limit stored. If a payment fails to arrive, a multi-stage dunning process follows. Digital B2B shops and EDI connections increasingly automate order processing between trading partners.
Framework agreements, minimum quantities and drop shipping
Many B2B relationships rest on framework agreements that fix prices, order quantities and terms for a longer period; individual deliveries then take place as call-offs against the contract. Minimum order quantities and fixed packaging units such as containers or pallets are also common and influence calculation, price tiering and warehouse logistics. In drop shipping, the supplier delivers directly to the retailer's end customer, without the goods passing through the retailer's warehouse. An ERP system must map such models end to end through stored terms, quantity and delivery logic, so that pricing, availability check and invoicing work together without manual rework.
B2B (business-to-business) in the ERP system
An ERP system maps the B2B process end to end – from master data to accounting. In the customer master, payment terms, credit limit, tax rules (domestic, EU, third country) and assignment to a customer segment are stored per account. On this basis, pricing automatically calculates the valid net price including discount tier and framework-agreement terms.
In fulfilment, the ERP links order, delivery note and invoice, monitors open items and controls the dunning process. Connections to B2B shops, marketplaces or EDI/EDIFACT interfaces take incoming orders directly into order processing. For legally compliant invoicing in commercial transactions, the e-invoice under EN 16931 (in Germany including XRechnung and ZUGFeRD) is decisive – since 2025, the obligation to receive electronic invoices between companies has applied in Germany.
B2B features as standard in many ERP systems
Systems such as Xentral, weclapp, SAP S/4HANA Cloud or Microsoft Dynamics 365 Business Central offer standard functions for this: customer-specific price lists, tiered and promotional prices, credit-limit checks, multi-stage approvals as well as integrated B2B shop and EDI connectors. How much depth is needed depends on the industry, channel structure and internationality.
Distinction: B2B vs. B2C, D2C and B2G
B2B is distinguished above all from B2C (business-to-consumer), the sale to private end consumers. In B2C, gross prices including VAT apply, along with consumer protection with a right of withdrawal, usually immediate payment and shorter, more emotional purchase decisions. B2B, by contrast, works with net prices, individual terms, purchase on account and longer, rationally shaped decision processes.
Related models are D2C (direct-to-consumer), where a manufacturer sells directly to end customers bypassing the trade, and B2G (business-to-government), trade with public-sector clients. In B2G in particular, the e-invoice (XRechnung, Peppol) has been mandatory for years. Many companies run several models in parallel – for example wholesale in B2B and their own online shop in B2C – and need an ERP for this that cleanly separates both price and tax logics.
DACH specifics in B2B
In the German-speaking region, tax and legal requirements shape the B2B business. In Germany, since 1 January 2025 there has been an obligation to be able to receive electronic invoices in domestic B2B transactions; issuing obligations follow in stages until 2028. The GoBD are decisive for audit-proof archiving and bookkeeping. Austria and Switzerland have their own frameworks, such as the QR invoice in Swiss payment transactions.
Added to this are intra-Community trade with reverse charge and the recapitulative statement, industry-standard payment terms, and a strong role for indirect distribution via wholesalers and specialist retailers. Checking business partners' VAT IDs and the correct VAT treatment of domestic, EU and third-country transactions are also part of everyday business. An ERP system for the DACH market should map these requirements as standard and offer a connection to DATEV or BMD for accounting.
Example
Example: wholesaler supplies specialist retailers
A mid-sized wholesaler for electrical installation material supplies around 400 specialist trade businesses and retailers. Each customer has its own price list in the ERP system: regular customers with high annual turnover receive better tiered prices, while temporary special terms apply for project business. If a customer orders 250 junction boxes, the stored volume price applies automatically, and the system checks the credit limit before approval.
Orders come in via a B2B online shop, by EDI from larger chains and by phone – all end up in the same order processing. Delivery is on account with a 30-day payment term and a 2% cash discount for payment within 10 days. The invoice is transmitted electronically as a ZUGFeRD file, and the ERP controls open items and dunning runs automatically.
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