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Kriya Payments

Don’t leave money on the table - digitise your payment terms

April 22, 2024
min read
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By offering extended payment terms, B2B merchants can grow revenue, stand out from the competition, and free-up working capital.

Not all business transactions feel like wins. Be it undervaluing your product or giving away too much for free, we’ve all had the feeling of missed opportunity when making a sale. 

B2B sales are particularly complex, and often inefficiencies in the process are as detrimental to your margin as lowballing your price. Without a digitised buyer experience and flexible payment terms on offer you’re leaving money on the table no matter the sale price. 

From increasing the number and size of orders, to reducing the friction and costs of doing business, digitising your trade credit with B2B payments will boost your revenue and let you outpace the competition. Here’s why. 

Payment terms as a competitive advantage

Are you manually performing credit and fraud checks on buyers? Instead of assessing their eligibility and offering standard trade credit terms funded off your balance sheet, there's a slicker way to offer payment terms to increase your share of a buyer’s wallet. 

Imagine a buyer needs £20,000 of wholesale goods on 30 day payment terms. If you can't offer this, you'll either get a smaller order (as they split their purchase across multiple suppliers) or miss out entirely. But if you can offer this on credit, you’ll get the full share of their wallet and the buyer’s full loyalty (as they’ll come to you next time instead of shopping around). 

Funding off your balance sheet often means taking a conservative view on setting spending limits. After-all the credit checks and credit control sits with your team, and it's company money being used to fund the payment terms. However, working with a thrid party to offer this means you outsource the risk, collection process and can offer those larger limits to win full share of wallet.

What’s more, digitising your payment terms works as a lead generation and sales tool. Your marketing team can differentiate your offer from competitors by offering a personalised, pre-approved spending limit to buyers at compaines you want to win. Your sales team can also close more deals faster by having access to instant credit and fraud decisioning software. Gone are the days of applying for finance and being slowed down by your finance team.

In short: if you’re not using payment terms as a growth tool, you’re leaving money on the table. 

Payment terms as revenue expansion

Many B2B merchants only offer terms to large distributors and buyers they know well, but digitising your trade credit widens the addressable market. Instant background checks can tell you whether you should trade with a new buyer and what spending limit to offer. Payment terms can be offered to first-time buyers and international companies, cutting out the need for middlemen and capturing more of the margin. 

In addition, with flexible payment terms you’re not only selling to more buyers, you’re able to sell them more too. By providing the spending limit to fund larger order sizes with better unit economics, buyers will purchase larger volumes. By offering market-beating limits, deferred payment terms and various payment methods, you’re simplifying the buying process and encouraging more frequent orders. 

In short: without digitising payment terms, you’re fishing in a smaller pool and leaving money on the table. 

Payment terms as working capital

Banks make money from money - borrowing funds from depositors and making interest on loans. But as a B2B merchant, every time you offer trade credit or payment terms, you’re funding interest-free loans from your balance sheet and tying up your working capital. You’re like a bank that’s lending for free to your buyers, which has two obvious downsides. First, you could be spending the money to grow your business by funding sales, marketing, hiring or product development. Second, you’re putting your own capital at risk and spending time assessing credit worthiness and fraud exposure for each buyer. 

But if you outsource this to a specialist provider like Kriya, you offload the risk and liquidity for funding payment terms, plus free up your finance team’s time for more valuable tasks. This has a major cash flow benefit too. You'll get paid in full after delivery is confirmed, while your buyer pays later on the ters they choose. Typically, buyers make larger orders if they have longer payment terms (i.e. 60 days+), but instead of waiting two months for payment, you can get paid in advance and source stock to fulfil their orders.

In short: if you’re managing payment terms internally, you’re leaving money on the table. 

Get ahead of the competitors

The concept of digitising your payment terms is simple: the easier you make the buying process, the more businesses will buy from you. By offering instant, flexible terms, higher spending limits and more ways to pay, you’ll capture greater market share. 

Business buyers increasingly expect the flexibility and immediacy we are accustomed to as consumer payments.
By digitising your trade credit with B2B Payments you offer:

  • A frictionless buyer experience that is instant and easy to use
  • Flexible payment terms and many ways to pay
  • A multichannel experience that works for buyers across online and offline sales channels.

Digitising trade credit with B2B payments is relatively new and early adopters stand to dominate their market. By offering B2B payments before your rivals, you’ll maximise your revenue potential and see the biggest gains in market share. 

In short: with digitised payment terms, you’re taking all the money from a larger table. 

B2B Payments to boost your growth

To learn more about our payments and digital trade credit solutions book a call with us today.
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