Statistics show that 60% of SMEs and 94% of medium-sized businesses are waiting on late invoices. At the same time, 40% of businesses say they cannot find time to chase up on late payments.
This can lead to operational inefficiencies and cash flow problems.
This is where a B2B Buy Now Pay Later (B2B BNPL) solution can help. It eliminates the credit risk for businesses and removes post-payment related admin. It also lets you offer invoicing without the admin that goes into vetting and assessing businesses’ creditworthiness.
The real costs of admin and overdue invoices
There is an old saying that goes, ‘time is money’, and it tells us that we should be more mindful of how we spend our time. Because wasting time could mean wasting money.
For example, how much time do you or your team spend on admin tasks like the ones below each week?
- Performing manual credit checks for new customers
- Chasing unpaid invoices
- Initiating debt collection procedures for payments in default
Most companies spend hours on the above tasks, and it can become a real time waste in your business. Chasing invoices alone costs companies an estimated 56.4 million hours each year. The impact of time-consuming administrative tasks is even greater for smaller companies, with fewer employees.
Since 93% of European businesses have 10 employees or less (with an average of less than 4 employees for SMEs), it is clear that every hour counts. One hour spent doing unnecessary paperwork is an hour that you or your employees could spend on sales development, relationship building, business improvements or generating new revenue streams.
Plus, when your team is already stretched, it may be impossible to find time for important tasks like chasing invoices. When that happens, you risk running into cash flow problems.
Cashflow problems are especially harmful for small and mid-sized businesses. 89% of business leaders say that late payments are preventing them from growing.
When overdue invoices pile up, many companies have a dilemma: Do they focus on keeping the business running, or do they spend time making sure invoices are paid?
If you’ve been in this situation before, or you know that your business could improve its operational efficiency and reduce payment admin time, B2B BNPL could be your solution.
Getting admin under control with B2B BNPL
Here are two ways that B2B BNPL immediately reduces admin and improves business efficiency:
Automates the credit assessment process and removes it from your team
Manually performing a credit check yourself can take days, and sometimes even weeks to complete. Most of the wait time is caused by delays in receiving necessary documents and information. If you keep your customer waiting too long, they might abandon the sale and turn to a competitor instead.
B2B BNPL solves this by automating the credit assessment process and performing the credit check on your behalf. As a result, you don’t have to spend any time on the assessment side of the process, and your customers that get approved can complete their purchase much quicker.
Takes chasing late invoices and debt collection off your plate
Looking at statistics across Europe, on average, invoices are usually paid 6 days late, 20% of invoices are late for more than 2 weeks, and 33% are late for more than a month.
As a business, it’s a hassle to chase these invoices, but also a necessary evil. If every one of your customers didn’t pay you on time, you’d soon run into issues paying your own invoices or debts, and this could jeopardize your business.
B2B BNPL solves this issue by acting as a middle-man between you and your customer. Different B2B BNPL providers have different ways of doing this, but one way or another, you get paid straight away, and then the B2B BNPL provider chases up late invoices and manages debt collection.
Keeping your business on track for growth with B2B BNPL
Improving operational efficiency and reducing your admin workload are major strategic advantages for your business. Because B2B BNPL eliminates repetitive tasks associated with managing your invoice payments, it frees you up to add more value to your business:
- You and your staff feel less overworked, which improves job satisfaction and performance
- You have more time to devote to key strategic tasks, like market research and fine-tuning your business proposition, which help grow your business
- You can also devote more time to offering an excellent customer experience, which helps boost customer loyalty
Add to this the key benefit that B2B BNPL keeps your cashflow running smoothly, and you can see why more and more B2B business leaders have now made it a key feature of their payment management strategy.
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