Trade Credit

The real ROI of Digital Trade Credit


Recent years have marked a significant shift to a digital-first approach in B2B. Yet while there has been a transformation of B2B commerce platforms, the same cannot be said of trade credit management.

Instead, merchants still rely on traditional practices which are manual in nature, costly, and act as a brake on business growth. Furthermore, traditional trade credit tends to be reserved for large buyers, while SMEs don’t get the payment terms that they deserve. The paradox of trade credit today is that those who need it most are the least likely to be offered it.

Digital Trade Credit solutions present a modern way to approach trade credit. Bringing a modern user experience (UX) and customer-centric approach to B2B, Digital Trade Credit draws together a number of key processes such as credit management, financing, collections and insurance into one single solution.

In doing so, it provides merchants with a number of benefits:

  • It saves costs in terms of reducing the number of trade credit-related solutions and services used, while reducing the supporting labour costs.
  • It allows for better financial management by providing protection against key risks, such as fraud, and non-payments, enabling merchants to grow their business in the knowledge that they will be paid.
  • It enables merchants to grow their customer base and increase customer loyalty, which in turn drives increased revenues. 

Change in trade credit management is unavoidable for three key reasons.

  1. The workflows that underpin trade credit management were built for an offline world and the process of managing trade credit accounts in this digital age is still extraordinarily painful.
  2. Buyers are increasingly happy to make large purchases online, with 77% of buyers in the same survey stating they were happy to spend more than $50,000 in a single transaction online. In line with this change, buyers also expect more from their online purchase experience.
  3. Traditional trade credit management presents a number of challenges to the merchants themselves. Namely, the manual labour of aggregating a range of solutions and providers and the increasing prevalence of fraud and credit risks within B2B.

There is a strong need for a new approach to trade credit management. The solution? Digital Trade Credit.

However, committing to a new investment is never easy and often B2B suppliers find it easier to carry on with the same processes rather than to go ahead with the perceived upheaval of change. 

Over the course of two further blog posts and a white paper, we compare the approaches of traditional credit management with those of Digital Trade Credit and demonstrate how maintaining the status quo also comes at a cost.

Want to calculate the real ROI of Digital Trade Credit? We've built a business case calculator for B2B Ecommerce which can help you to visualise the cost and revenue benefits you can expect from offering trade credit. Use the trade credit calculator now.

You can also download the full white paper now by submitting the form below.

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