Across the increasingly complex and competitive B2B landscape, extended payment terms are becoming the norm as businesses are prioritizing cash flow management and payment flexibility with a greater sense of urgency. Against a backdrop of economic and geopolitical uncertainty and ongoing supply chain disruptions, companies operating in different industry verticals are calling for longer repayment periods to ease pressure on working capital. Suppliers, in turn, are adapting by offering extended terms – often 60 to 90 days – to attract and retain customers, ensuring steady sales volumes while encouraging long-term partnerships. 

This is part of the recent shift towards a more buyer-centric market, in which buyers have come to expect flexible payment structures as a matter of course, enabling them to manage operational expenses without straining credit. Unlike the pre-Covid era, where suppliers held all the cards so to speak, buyers are now increasingly dictating terms of engagement in B2B transactions, particularly when it comes to flexible payment terms.

Liquidity & payment flexibility drive purchasing decisions 

A recent report from economic consultancy Cebr in conjunction with UK fintech company Iwoca revealed that one in six B2B sellers now offer their business customers more than 60 day payment terms. Since 2020, the number of suppliers extending payment terms beyond 60 days has risen significantly from 7% to 17%, driven by growing demand for payment flexibility. According to the report, more than 84% of suppliers attest to adjusting payment terms for business customers – nearly double the 46% recorded four years ago – as they adapt to evolving payment expectations to secure sales. 

The report also demonstrates the benefits of offering trade credit, with two-thirds of B2B sellers attesting to increased sales following the implementation of flexible payment terms. Customer loyalty is also an important factor in this shift, with three-quarters of respondents providing longer repayment terms for loyal clients or bigger orders. On the buyer side, nearly half of business customers admitted to avoiding or considering avoiding suppliers with short or inflexible payment terms, highlighting the critical role of extended credit in maintaining competitive advantage.

Offer extended payment terms without absorbing risk

Our recently launched AI-powered Accounts Receivable platform empowers wholesalers, distributors, B2B sellers, and 3PL companies to offer extended payment terms of up to 90 days without assuming credit risk, allowing them to focus on sales growth rather than debt collection and payment underwriting. It has already proven to be extremely popular among clients such as e-commerce fulfillment platform Portless, mobile phone accessories brand APLONG, Chinese sourcing agent Jingsourcing, and global e-Bike brand Himiway, and our roster of clients continue to grow.

By leveraging AI-driven credit risk assessment and real-time financial data analysis, we can quickly evaluate customer creditworthiness, ensuring businesses can extend flexible terms while mitigating the risk of defaults. Through AI-powered invoice financing and embedded B2B BNPL, we ensure companies receive upfront payments while their customers pay over time, improving cash flow without impacting balance sheets. 

Set customized credit limits

It’s important to note that sellers don’t have to jump in at the deep end right away in terms of offering far-reaching credit flexibility, they can set customized limits for each customer. Customers can clearly see their available credit, and once they exceed their limit, they are required to settle outstanding invoices upfront, reducing confusion and minimizing payment delays. Credit terms can also be tailored to each client based on factors like relationship history, business volume or contract duration. 

Of course, managing credit limits manually can be time-consuming and prone to errors, but our automated credit management solution streamlines the process, adjusting limits dynamically and notifying businesses of any changes in a customer’s financial standing or credit usage. By offering extended payment terms, sellers can demonstrate their commitment to supporting buyers’ financial needs, and this much-appreciated flexibility helps buyers manage cash flow more effectively. Ultimately, this approach promotes long-term partnerships and creates a mutually beneficial environment for both sellers and buyers.

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