As a reflection of our economic times, cash has become more important than ever. The growing trend of extending supplier payment terms is catching fire among large companies around the world. Some have even started extending payment terms up to 60-100 days to their suppliers. While this can be a boon to the companies, freeing up billions of dollars annually for each of them, the impact of these changes on suppliers, especially smaller ones, can be huge. Squeezing supplier cash flow could trigger price increases on every-day consumer products, create risk in the supply chain and jeopardize the financial stability of smaller suppliers, in particular.
The new electronic payment service recently announced by Basware and MasterCard addresses this problem head on by changing the way businesses around the world pay and get paid. Our combined approach solves both parts of the payment problem by tackling the time-consuming, manual invoicing process that slows down payment cycles, as well as the issues caused by the practice of extending payment terms. Our global B2B payment solution will ensure that suppliers are quickly paid upon invoice approval, while extending payment terms for buyers.
The trend of extended payment terms is expected to continue to spread among large companies worldwide. With innovative payment solutions such as our joint approach with MasterCard, buyers and suppliers alike can maintain critical cash flow through a simplified process. This not only alleviates financial pressures and bolsters the stability of the supply chain, but also it also reduces payment issues that can get in the way of strong buyer-supplier relationships.