How to Start Offering Net Terms Online

Taking net terms payments online in B2B is a game-changer. Businesses can speed up sales cycles and drive more revenue by making purchasing with net terms as easy as buying a shirt on Amazon.

Done well, digital net terms allow you to optimize the conversion of deals and keep your customers happy. On the flip side, without the right solution, net terms can create friction and drive a wedge between you and your customers.

The challenges

For end consumers, paying online in installments is feasible with buy-now-pay-later solutions. In offline B2B transactions, paying later with net terms or trade credit is just how commerce works. Buying steel, medical supplies, and chemicals, isn’t something every business can cover upfront. However, taking this experience online can prove challenging. For B2B merchants, offering terms can mean:

• Manual data collection 
• Manual underwriting
• High invoice factoring fees
• Slow approvals for customers

Even if you hire a team that will do underwriting, analyze your customers’ credit history, and approve them, providing terms at scale is a major task to undertake. And the cost of doing this process incorrectly can not only hurt your cash flow, but if good customers are declined or not offered the terms they want when they need it, trust and loyalty can take a hit. 

Because collecting and financing terms is almost a requirement for every business, there are many solutions out there that help in this process. 

Invoice factoring or offering terms through a payment partner

Invoice factoring companies can help protect cash flow by paying you upfront for a percentage of the transaction while they manage collection from your customers. They can also provide lines of credit. Some can connect directly to your checkout and offer embedded finance. Others rely on mostly on offline processes and can’t support net terms as a one-click checkout option. 

For those that can support digital terms, it’s important to look out for how they’re financing your transactions. Many solutions out there facilitate transactions out to different financial institutions (banks, lenders, factors, etc.) 

In this case, the financing decision isn’t done in-house, and the experience for your customers can take a hit. If your customers want to increase their credit limit, the factoring or working capital company needs to go to the bank or financial institution to then come back with a decision. Essentially, you’re dealing with a middle man, and this can lead to slower turnaround times for decisions and support. In B2B eCommerce, a subpar checkout experience can be the difference between your customers choosing to do business with you or with your competition.

Choosing a payment partner

Partnering with a solution built for the needs of B2B eCommerce can help you offer digital net terms without the hassle. To maximize approvals seamlessly, there are a number of features that are important to look out for:

Customer experience first

Lengthy application forms or slow qualification times can turn customers away. Plus, the ability to have customers request terms straight from the checkout is becoming increasingly expected in providing consumer-like experiences. With Balance Payments—a leading payment provider—customers can request to be qualified for terms straight from the checkout. By having the option to connect their bank account, Balance can qualify buyers for terms within seconds.

In-house financing

There are many net-term solutions out there, but many still require you to build the integration to the checkout, process the payment, and keep track of invoices. Balance Payments, the payments platform built specifically for B2B, manages 100% of the payment stack in-house, so if customers want to update their terms or add new payment methods, they don’t have to deal with an additional third party. 

B2B expertise and aligning with your policies

It’s important that your provider has familiarity with B2B payment nuances. For example, in B2B, the payment doesn’t end at checkout. The transaction is based on milestones. Maybe you only want to trigger the payment or invoice after delivery. Or maybe net 60 kicks off at the start of the service? There’s no one-size-fits-all when it comes to deciding on a credit policy or application process.

Maximize growth by offering net terms through a payment provider to your B2B customers

The right approach to terms can make all the difference in a successful online experience that not only helps customers but can maximize growth for your business. The downsides are the risk of customers paying either late or not at all and the resources and time involved in digital terms that fall short of meeting buyers’ needs. 

It all comes down to being able to manage both the risk and safeguard the customer experience. Ultimately, this will help you remove barriers to purchase, boost cash flow, and increase overall sales. Balance Payments integrates seamlessly with B2B Wave and lets your B2B customers pay how they want when they want.