Number of B2B sellers offering 60+ day payment terms doubles since 2020
One in six B2B sellers (suppliers) are offering business customers over two months to pay their invoices, according to a new joint report from economic consultancy Cebr and iwoca.
The report Credit Where It’s Due, commissioned by iwoca––one of Europe’s largest small business lenders––reveals the number of suppliers offering repayment terms over 60 days to customers has surged from just 7% of suppliers in 2020 to 17% in 2024.
This comes as more businesses are asking for payment flexibility from their suppliers. More than eight in 10 (84%) suppliers say they have to adjust payment terms for business customers, nearly twice (46%) the rate four years ago.
Flexibility critical to closing deals
Suppliers are having to adapt to this new payments landscape in order to secure sales. Two in three (66%) of B2B sellers report that offering trade credit increased their number of sales. Three out of four (75%) suppliers offer longer repayment terms for loyal or large customers, or for bigger orders.
On the other side of the deal, nearly half (48%) of surveyed business customers reported avoiding using a supplier, or considering doing so, due to short or non-existent payment terms.
Adjustable payment terms bring risk
Although a welcome trend for buyers, the report finds outstanding payments in 2024 are more common than they were at the height of the pandemic. Nearly half (48%) of UK suppliers serving business customers are now owed in excess of £10,000 from their trade customers, up 13pp from 2020 levels.
30% of suppliers are very confident that their invoices will be repaid, but fewer than one in three (29%) are ‘very confident’ in assessing customers’ creditworthiness.
Just six in 10 (58%) suppliers offering flexible payment terms conduct credit checks at all, suggesting there is a gap for resources that could support businesses to offer adjustable payment terms.
Commenting on the report’s findings, iwocaPay co-lead Lara Gilman said: “The sector has always talked about payment terms in the context of big corporations trampling over small ones. But since the pandemic it’s clear that across the board, firms––including SMEs––are now calling for flexibility from their suppliers to keep business moving.
However, the shift towards trade credit comes with significant risks for B2B suppliers. iwocaPay, our B2B buy-now-pay-later solution, is designed specifically to address this problem––by taking on the risk for B2B suppliers, it allows them to offer flexible payment terms while ensuring they get paid on time. This gives them the time and resources to focus on growth.”
Christopher Breen, head of economic insight at Cebr said: “Trade credit continues to be an important tool in B2B transactions, offering buyers the flexibility to purchase now and pay later. However, it presents challenges for suppliers, such as late payments and the potential accumulation of bad debt. Despite these risks, an overwhelming majority of B2B suppliers offer some form of payment terms, recognising the importance of trade credit in securing sales. The already widespread use of trade credit systems presents an opportunity for them to be modernised by the use of digital solutions, which could help both suppliers and customers to navigate these financial pressures effectively.”
iwocaPay helps to solve the B2B payments problem, addressing both the payment experience and the payment terms. With iwocaPay, B2B businesses get a cost-effective, frictionless payment solution with built-in 90-day payment terms. Suppliers can offer their customers the flexibility to choose how and when they pay. Any customer can pay instantly with a two-click solution built on secure and seamless open banking technology.
