Pay Suppliers on Time while Extending Your DPO
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 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. Before you burn your bridges with your suppliers, why not consider paying your invoices with your preferred credit card?
On average, small businesses account for more than 35% of the overall B2B corporate card spending. This shows that more and more companies are taking advantage of their credit card float to leverage 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. 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 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 Card
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 with credit card, even if your supplier does not offer it as a payment method.
Simply register for a free account, upload your card and invoice details and begin making payments. Your suppliers will be paid by means of a traditional bank transfer. Click here for more detailed instructions on how Billhop works.
Streamline your accounting process and pay all your invoices with Billhop today!