Buy now pay later (BNPL) services have quickly become commonplace for consumers. Company reports for ASX-listed BNPL providers outline that the value of BNPL transactions grew by 55 per cent in 2019-20, and in the last two financial years, BNPL transactions have tripled. Offering people the ability to spread out their payments for goods and services across regular intervals enables consumers to better manage their own cash flow. And now, businesses are beginning to enjoy the benefits as well. With the potential to transform how companies manage their cash flow, BNPL for businesses is here to stay.
In this article, we outline some of the key BNPL trends and the benefits that suppliers and wholesalers can enjoy by providing more payment options to business customers.
Shift the financial risk with third-party business finance
The ability for B2B transactions to also be completed through BNPL provides many opportunities to businesses to strengthen their cash flow and reduce the non-payment financial risk. Payment solutions such as Spenda enable buyers to delay their payments while still getting their goods delivered on time. This helps suppliers get paid faster while reducing the financial risk associated with typical B2B payment processes such as trade credit. With trade credit, a business customer will receive their order, but a supplier might not get paid for over a month, which can significantly impact cash flow.
Increase payment terms without restricting your cash flow
Using BNPL options for B2B transactions effectively increases a business’s payment terms without restricting its cash flow or exposing it to further risk. With the financial risk assumed by a third-party finance provider, the business supplier gets paid on time, while the business customer gets to extend or spread their payments over the chosen time frame. What once would have been 30-day payment terms can now be increased up to an additional month or more.
Get paid faster and better manage your cash flow with Spenda
BNPL for B2B transactions stops the late payments cycle that has perpetuated throughout Australia for many years. And in a time where businesses need to be continually prepared for uncertainty, providing B2B BNPL functionality allows business owners to be more proactive with their cash flow forecasting. It’s a critical change especially for SMEs that often need to plan big investments well in advance.
If you’re looking to provide more payment options in your business, but you’re not sure where to start, download our guide on how to boost cash flow for your business. You’ll learn how to future proof your business with digital tools and integrated payments that boost your cash flow and provide a better customer experience.
This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.