How B2B Buy Now Pay Later solves the issue of late invoice payments
Cash flow is important for your business because it helps you meet financial obligations and plan for the future. But when your customers or clients are late with their payments, it can create a payment bottleneck that negatively impacts your operations. If this is a problem for your business, you’re not alone.
Statistics show that, on average, 30 percent of invoices aren’t paid within the agreed terms and 1 in 5 insolvencies attribute their demise to late payments.
So what can you do when you’re owed money but it’s late coming in, and you need money to keep your company moving forward?
Why invoices are often paid too late
Late invoice payments cost your business money, and risk putting you in danger of missing payments yourself.
And late invoice payments have become a bad habit for many. The average invoice term is 30 days, yet many businesses try to put off payment for longer if they can.
This usually happens for a few reasons:
1. Cash flow
Keeping their money in their bank account for as long as possible means that they are able to use it for other things, like buying new material or equipment, or paying even older invoices.
2. It’s Accepted
If your invoice terms don’t come with an incentive for early or on-time payment or a penalty for late payment, your buyers’ motivation to prioritise the payment can be low.
3. Inefficient accounts payable process or invoicing errors
Perhaps the email address was wrong, the total wasn’t checked properly, it was sent to the wrong department, or you didn’t marry up the purchase order number with the invoice. There can be endless administrative reasons that invoices are missed or not paid on time.
Seller vs buyer cash flow objectives
It’s ironic, but you and your buyers have the same objective: to maintain cash flow and keep your businesses running steadily, and ideally, growing.
But, you have opposing ways of achieving this.
You keep your cash flow going by getting paid as quickly as possible, ideally straight after a purchase has been made.
Your buyers, on the other hand, keep their cash flow going by paying you as late as possible. The two don’t go together, and one will always lose out where the other gains. Unless, you offer a solution like
How B2B Buy Now, Pay Later helps both parties
B2B Buy Now, Pay Later is a service that allows your business buyers to make a purchase today, and pay at a future date.
Your buyers are most likely already familiar with the concept from shopping as consumers. Research even shows that 77% of B2B buyers want the same experience making business purchases as they have when buying consumer goods.
When used in a B2B situation, Buy Now, Pay Later is incredibly effective at solving the problem we discussed earlier – helping both you and your buyers maintain a stable and predictable cash flow.
This is because, the BNPL provider pays you quicker than 30 days, for every purchase made.
When using a Buy Now, Pay Later service such as Biller, you get paid on time, every time. No late payments, no chasing anyone. Payment is usually made within seven to 14 days. And sellers are able to grow their customer base, while the third-party service takes on the risk and responsibility of screening the buyer and ensuring they make payment.
And buyers can choose to delay their payments for up to 90 days, so they can make the purchases they need and still maintain their cash flow.
How can B2B Buy Now, Pay Later help your business?
If you’re tired of chasing invoices or juggling competing financial priorities, B2B Buy Now, Pay Later could be for you.
We’d love to show you how Biller can work in your online shop. Explore our website to learn more or get in touch to schedule a demo.
