Buyers Want to Pay Later. Suppliers Want Cash Earlier. Who Funds the Difference?

In the evolving landscape of B2B payments, a fundamental dilemma persists: buyers seek to delay cash outflows while suppliers aim to receive payments promptly. This age-old conflict now manifests as a burgeoning business model, as the digitization of transactions fails to alter the underlying economic relationship. The tension between cash flow management for buyers and receivables management for suppliers has long been addressed through negotiated payment terms, but finance leaders are now recognizing the potential for generating financing economics around these payments.

The B2B payments industry has been streamlining payment processes for years, but the true opportunity lies in the interval between transactions. For buyers, these days represent liquidity, while for suppliers, they represent outstanding receivables. Banks, financial technology companies, and suppliers can all play a role in financing this interval, each offering their own solutions.

A growing number of CFOs and treasurers are leveraging working capital solutions to accelerate payments to suppliers, maintain agility, and strengthen supplier relationships. According to a Visa report in collaboration with PYMNTS Intelligence, seven out of ten "Adaptive" CFOs and treasurers utilize these solutions. This shift challenges the traditional understanding of an invoice, which should now be viewed as a short-term claim on the payment amount, influenced by interest rates, credit risk, liquidity needs, and the financial condition of the parties involved.

The convergence of accounts payable (AP) and accounts receivable (AR) software is becoming increasingly important. AP platforms can track invoice approvals, expected payment dates, and historical payment behavior, while AR platforms can monitor outstanding invoices, collection patterns, and demand for early payments. By offering multiple payment dates with varying economic values, AR platforms can provide buyers with a range of options, while AP systems can allow them to compare the benefits of early payment discounts against the returns from short-term investments.

As payment technology providers become more integrated, they gain valuable insights into commercial behavior surrounding transactions. This information can be leveraged for underwriting short-duration credit and developing working-capital products. The key question is no longer which platform processes the payment, but rather which institution controls the decision about when the buyer's cash becomes the supplier's cash, and who benefits from the financing that occurs during this period.