Giving credit is not a luxury in B2B (Business-to-Business) sales, it’s a market expectation. Whether it’s Net 30, Net 60, or even Net 90 in heavy industries, your corporate clients assume you will finance the operation.

The problem arises when your company starts growing rapidly and you find yourself financing dozens of clients at the same time. Suddenly, your Accounts Receivable skyrockets, and you run out of working capital to pay payroll or your suppliers.

“82% of B2B companies that fail don’t do so because of a lack of profitability, but because of a cash flow collapse caused by unrecoverable accounts receivable.”

In this article, we will break down the best practices to extend credit to your clients without risking the financial viability of your operation.

1. The Dynamic Credit Limits Model

Most B2B SMEs make the mistake of offering the same terms to everyone. A new client receives the same treatment as one with three years of perfect history. This is financially irresponsible.

Implement an Internal “Credit Score”

Don’t rely solely on the commercial credit bureau. Create your own risk matrix evaluating:

  • Purchase frequency: Does the client buy every week or once a year?
  • Days Sales Outstanding (DSO): If a client has Net 30 terms but historically pays on day 45, their credit limit should be frozen.
  • Volume vs. Profitability: Sometimes, the biggest client is the one leveraging you the most. Ensure that the operating margin justifies the financial cost of credit.

By using Cord, you can automate these blocks. If a client has an overdue invoice, the system will prevent them from approving a new quote until they regularize their balance.

2. Factoring and Early Payment Discounts

The cost of capital is never zero. If you give a client 30 days to pay, you are absorbing that cost. You have two levers to mitigate it:

The power of 2/10 Net 30

Offer a discount (e.g., 2%) if the client pays within the first 10 days; otherwise, they must pay the full amount in 30 days. For many corporations, saving 2% is a giant incentive and injects immediate liquidity into your business.

Modern Factoring

If your clients are corporate giants (e.g., Walmart, Bimbo), they won’t pay before 60 days. Use Fintech factoring platforms that advance 80% or 90% of the invoice the same day you issue it. The cost of this financing (usually 1.5% - 3%) should be included in your sales price margin from day zero.

3. Relentless Collection Automation

The “I’ll let you know when the deposit is done” is the enemy of your cash flow.

  1. Preventive reminders: Send an email 3 days before the due date. “Your invoice is due this Friday”.
  2. Overdue alerts: Day 1 of delay must trigger an automatic email. Day 5, a phone call from the account executive.
  3. Service pauses: Be strict. If you sell software or provide continuous raw materials, block the service on Day 15 of default.

Conclusion

B2B credit is a fantastic sales tool, but it must be treated as a financial instrument with calculated risks. Systematize your limits, encourage early payment, and automate your reminders. Your cash flow (and your peace of mind) will thank you.