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How accepting credit cards can benefit your business

3 October - 3 min read

As cash flow pressures persist, businesses need to look for smart ways to effectively manage their finances without causing inconveniences for their trading partners. Many companies have begun to more closely manage their cash flow in the last year by reducing payment terms, delaying payments to suppliers, increasing resourcing on chasing late invoices, and taking out bank loans to bridge cash flow gaps. While these methods may help businesses address financial challenges in the short term, they don’t provide a viable long-term solution. This article outlines how a really simple change such as accepting credit card payments can improve cash flow management and provide immense benefits to both your business and that of your customers.

How Australian companies have been addressing late B2B payments

Payment default concerns persist for companies across all industries in Australia due to the uncertainty driven by high inflation and geopolitical tension. To mitigate the risk of payment default, companies have lowered their payment terms for business-to-business (B2B) customers to an average of 23 days, two weeks shorter than the same time last year. Over half  have spent more time following up late payments, and another half have delayed payments to their suppliers to preserve cash. For those requiring financing to bridge cash flow gaps, 75 per cent opted for bank loans. Taking swift action is necessary in the face of customer payment default. Still, many of the payment options available to businesses are inefficient and time-consuming.

Credit card use in B2B payments has grown

Accepting credit card payments helps businesses get paid on time while giving the customer more time to pay if they take advantage of the interest-free period from their card provider. Further, a recent study found that almost half of businesses now use credit cards for B2B payments, and here’s why:

  • Convenience: Make payments anywhere, anytime by entering the business credit card details into the supplier’s payment portal or page.
  • Potential rebates and award points: Get cashback on purchases or collect award points that can be used to fund other business expenses, such as gifts or travel.
  • Fraud protection: Security measures such as tokenisation offer better payment security than legacy systems such as EFT payments, which are difficult to reconcile and not secure.
  • Purchase now, pay later: Full payment isn’t required until the credit card statement is received, allowing customers to take advantage of their card provider’s interest-free period.

Accepting credit card payments shouldn’t be difficult or time-consuming

The right integrated payment provider should make the process of accepting credit card payments for B2B transactions simple and easy. With Spenda’s platform for example, suppliers can easily send invoices and statements directly to their customers by using a payment link. Customers can then make payment directly via the secure portal and choose their preferred payment option, including the ability to pay via credit card, even if their supplier doesn’t have a credit card facility. Further, by using an integrated payment platform, reconciliation with accounting and ERP systems becomes more efficient and accurate by establishing a single source of truth for all payment data.

Spenda’s pay by link functionality makes it easy for customers to pay and removes the need to share sensitive payment information with a third party.

Offer credit card payments with Spenda

Offering credit card payments for B2B transactions addresses many of the cash flow issues that companies face without shifting financial risk and exposure across the supply chain. The supplier gets paid on time, and the customer gets more time to pay, along with other benefits such as taking advantage of rebates and collecting award points. And by creating a single source of truth for all transaction data, reconciliation and reporting become more efficient and accurate, freeing up time for high-value tasks and stopping late payments at their source.

Spenda serves as both a technology solutions provider and a payment processor, delivering the essential infrastructure to streamline business processes before, during, and after payment events. Our comprehensive solution empowers businesses to effortlessly manage invoices, facilitate payments, and even access on-demand funding, all within the Spenda ecosystem. With our integrated platform, businesses can optimise their financial operations and enhance overall efficiency.

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