Business transaction

Business transaction
See also

Business transactions- are one of three levels of business interaction. Other levels are determining mutual capacity and determining long-term contracts. This model is called the BAT (Business Action Theory) model. A business transaction is an activity that occurs between the seller and buyer of an item or service. Purchase is interaction with suppliers. Many small and medium-sized enterprises have long-term relationships with their customers and suppliers. The purchase usually includes negotiations between business entities[1].

Business transactions using the internet

In the internet age, business transactions are increasingly being carried out via electronic communications called the internet. People interested in a given product or service can obtain all important and necessary information without leaving home. It is not needed to talk to the person who has the task to sell the product or service. Therefore, the Internet has become a tool thanks to which it is possible to make business transactions such as buying and selling the products it offers[2].

Modular business transaction platform

The platform concerns the system and the method of financial transactions. In particular, a system that is based on the network and the method of payment and invoicing. Due to the growing popularity of doing business online, online financial transactions are becoming more common. This solution has a lot of advantages, e.g. when paying bills. You can reduce the costs associated with it, such as costs of preparing bank fees, costs of settlements, closing, etc. Such a business transaction system can support transactions of any entity with access to the Internet. Traditional invoice payment methods and invoice presentations require too much equipment for distribution and invoice preparation. This also applies to the reconciliation and collection of invoice payments[3]

Dealing with risks of transnational business transactions

Risk is an inevitable and inseparable element of every business transaction. When the transaction goes abroad, the level and sources of risk increase. The factors that lead to this are different. One of them is communication despite the existence of instant electronic transmissions. Communication may be misunderstood by language differences. The distance between them is not good for business partners. Face-to-face meetings are less likely. This makes it difficult to observe the other person in the transaction. It causes that the credibility of available information decreases. Risks associated with international transactions are also increased by concerns about transport. International transactions also involve the fulfillment of a number of additional provisions. However, companies are too often afraid of foreign transactions. Most of them, however, use the help of qualified lawyers who facilitate the conclusion of such difficult business transactions. Their tasks are[4]:

  • identify the risks involved in a transaction
  • eliminate risk when possible
  • reduce the level of risk where its elimination is not possible

References

Footnotes

  1. Goldkuhl G.(2004)
  2. Szlam A., Walder K. A.,(2005)
  3. Ludwig K.(2002)
  4. Brand R. A.(2018)

Author: Agnieszka Kurbiel