4th August 2022

The bottom line for virtually all businesses is simple: The longer you can extend your DPO, the more control you will have over your cash flow. As with many things in life, this is much easier said than done. The increasing pressure from suppliers and anxiety over mounting invoices is not something that can be easily overlooked.

The Trials and Tribulations of Extending Your DPO

DPO, or Days Payable Outstanding, indicates the amount of time that businesses take to pay their vendors or suppliers.

In fact, research has shown that around 67% of companies intend to extend their supplier payment terms as a means to improve their working capital and 46% of them admit that their finance and administration systems are outdated.

Before you burn your bridges with your suppliers, why not consider paying your invoices with a corporate credit card?

Increasingly, corporations are taking advantage of their credit card float to extend their DPO. To further sweeten the deal, suppliers readily offer early payment discounts and programmes in a bid to get paid sooner.

In addition, paying suppliers with credit card can give a much needed boost to a company's accounting process as cards offer extensive remittance data and provide real time transaction updates. This makes it easier to cross-reference payment details. It is certainly no stretch of the imagination to say that corporate credit cards provide an elegant solution to the B2B market's pressing need for data and record keeping.

Enhance Your Accounts Payable

It might be hard to fathom that in this digitised work-from-home age, companies still process their Accounts Payable (AP) and Accounts Receivable (AR) manually. Yet, this is the case for businesses worldwide as they struggle to transition from their legacy systems and manual processes. As a matter of fact, almost 1 in 5 organisations in the UK alone rely solely on manual data reconciliation.

Popular payment methods like cash, cheque and even bank transfer require a lot of time and manpower to monitor, record and track. The potential for human error is significantly increased and may even lead to huge fines when data is inaccurately reported.

Again, we see that by paying suppliers with credit card, businesses can streamline their inefficient processes and centralise their payments. The data provided by credit card transactions can also be incorporated into enterprise resource planning (ERP) and accounting systems.

The Case for Corporate Credit Cards

The case for using credit cards to pay all your invoices is plain and simple: On top of reconciling payments, you can pay your suppliers early (and not to mention, enjoy early payments discounts) without sacrificing your cash flow. Most major credit companies offer up to 56 days of interest-free grace period.

This win-win solution alone should convince most companies to pay with their credit card. And it would seem they would be on board save for one crucial problem - suppliers' reluctance to take on the fees associated with accepting credit card payments.

The Billhop Solution

Thankfully, Billhop has risen to the challenge and is bridging the gap between businesses and suppliers.

Founded in 2012 to address the low card acceptance rate in the B2B sphere, Billhop allows you to pay any invoice by credit card, even if your supplier does not offer it as a payment method.

Traditionally, businesses across the globe have mitigated the gap left by the time between paying suppliers and receiving payments from customers by taking out overdrafts, applying for loans and even resorting to invoice factoring.

Needless to say, these solutions are far from ideal and do not address the long-term, underlying problem that most businesses are faced with - how to stop playing catch up with their cash flow.

How It Works

Teaming up with various card issuers in the industry, Billhop provides enterprises with customised commercial cards that have extended credit lines.

Equipped with these credit cards, corporations can pay their suppliers by credit card - even those who do not accept card payments - and free up their cash flow.

Their suppliers will receive payment by means of regular bank transfer so they do not need to be onboarded or make changes to their existing accounts receivable set-up.

Corporations can defer supplier payments by up to 120 days, which can be crucial to bridge liquidity gaps left when their own customers delay payments.

To learn more about our cutting edge solutions and how you too can benefit from leveraging your credit card float, fill out our contact us form.

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Billhop AB is a Swedish payment institute, authorised and regulated in Sweden by the Swedish Financial Supervisory Authority. We are exempt from the prohibition, in regulation 138 of the UK Payment Services Regulations 2017, on providing payment services in the United Kingdom and we are not authorised by the UK Financial Conduct Authority. Billhop upholds industry best-in-class security standards including 2FA and issuer security solutions such as 3DS. All client funds are safeguarded through standard client funds account setup.