B2B credit is a financial agreement between businesses where the seller allows the buyer to make payments for goods and services at a later date. Implementing B2B credit may require more processing time if done manually.
What to look for when automating B2B credit? What pieces of the B2B credit process should be automated?
When automating B2B credit, look for platform flexibility, ease of use, financing, and access to global lenders, because the underwriting process where credit terms are decided should be automated, and based on your business rules.
An effective B2B credit system offers the following:
- Simple buying experience – Automated credit programs that offer a consumer-like experience to secure and receive credit easily directly from the seller. During order placement or checkout, B2B credit platforms offer net terms and buy now pay later options directly.
- Global lending network – Customize credit terms from a worldwide network of lenders.
- Flexible options – Examples of flexible credit terms include pre-paid, net terms, and pay-over-time choices.
- Financing – Eliminate cash flow gaps and get paid early, even when buyers pay on terms.
- Seamless integrations – Integrations with current systems and accounts receivable platforms accelerate credit processing and financing.
What are B2B credit Risk Management Strategies and Best Practices?
B2B credit best practices are guidelines that help you manage your credit risk including:
- Thoroughly vet buyers – Review their credit history, financial stability, and payment history with other vendors. Understanding your customer base can help assess payment risk and tailor terms and conditions accordingly.
- Establish clear terms and conditions – Clearly communicate credit policies and terms. Payment terms should be clearly stated upfront, including any late fees or interest charges.
- Monitor customer accounts: Regularly check in on customers to ensure they are staying current on their payments. If a customer starts to fall behind, take action immediately to prevent further delinquency.