Extended Payment Terms in B2B: What, Why, and How?

Your suppliers want immediate payment. Your cash flow demands you wait. Between these two forces, you’re constantly juggling. Pushing one invoice here. Drawing on credit lines there. Always buying time.

What if you didn’t have to choose between preserving liquidity and keeping your vendors happy?

Extended payment terms (also known as deferred payment solutions) let you pay suppliers immediately, while deferring your actual cash outflow by 30, 60, or even 90 days. 

In today’s economic climate — tight credit, inflation, pressure on working capital — this kind of flexibility isn’t a luxury. It’s a lifeline.

So who is this for? How does it work in practice? And why consider it if you already have bank financing in place?

Let’s break it down.

What Are Extended Payment Terms? 

Defining Extended Payment Terms in B2B 

The term “deferred payment” gets thrown around a lot. Let’s set the record straight.

In this article, we’re talking about one specific scenario:

You pay your supplier immediately — but the cash doesn’t leave your account until weeks later.

Not to be confused with B2C options like “Buy Now, Pay Later” or credit card delays. This is a cash flow solution designed for businesses.

And for CFOs or Finance teams, it’s a powerful one.

It means honoring supplier commitments without draining liquidity.

It means absorbing late receivables without maxing out credit lines.

It means managing cash with clarity, not chaos.

How Payment with Terms Differs from B2C, Deferred Debit

Extended payment terms can mean several things depending on context. Here’s a comparison table to clarify:

Why Extended Payment Terms Are Back in the Spotlight 

A Need for Flexibility, More Than Ever

Cash flow is under pressure. Interest rates are high. Supply chains are shaky. Global uncertainties abound.

Across the UK and Europe, the signals are clear:

• Average B2B payment terms stretched to around 53 days in 2024
• Late payments affected over 60% of businesses
• Insolvencies surged across Europe, with some countries seeing +23% year-on-year
• 22% of SMEs reported tougher access to external financing

This pressure isn’t going anywhere. That’s why more businesses are turning to flexible tools like deferred payments. Not just to survive, but to scale with confidence.

• Democratized access for SMEs: no longer reserved for large corporations
• Digitization of procurement and financial tools: integrated into existing ERPs, P2P systems, and treasury management platforms
• More strategic approach: cash becomes a growth lever. Beyond crisis reflexes, managing cash flow becomes a sustainable competitive advantage

In short? It’s no longer just a defensive tool. It’s how modern finance leaders optimize their working capital, secure operations, and unlock growth.

Benefits of Extended Payment Terms in B2B 

Let’s talk outcomes. With the right partner, deferred payment becomes a quadruple win. 

• More flexibility:  Extend your payment windows (30, 60, 90 days) based on your needs.
• Smarter cash flow: Smooth out cash outflows. Absorb bumps in the road without panic.
• Financial strength: Improve working capital ratios without resorting to traditional credit lines.
• Strengthened supplier relationships: Your vendors get paid instantly. That’s a relationship builder – not a breaker.

In practice, extended payment terms play three major roles:

• Negotiation lever: Having liquidity gives you weight to secure better commercial terms with suppliers.
• Shield during uncertainty: Cost increases, collection delays, or activity slowdowns no longer compromise business continuity.
• Strategic argument in EXCO meetings: You guide investment decisions with precision and secure working capital without systematic dependence on bank credit.

Who Benefits from Payment With Terms?

Size isn’t the determining factor. Extended payment terms serve any business juggling purchases and treasury constraints. 

Think:

• Businesses with seasonal cash flow peaks
• Fast-growing companies scaling operations
• Teams managing high supplier volumes with varying terms

It also solves real-life operational pain points:

1. Struggling to unify supplier terms?

You work with hundreds, maybe thousands, of vendors. Aligning payment conditions is a mess. Deferred payment lets you apply a single policy across the board, regardless of supplier size or payment cycle.

2. Internal tension between cash control and procurement goals?

Finance wants to hold cash. Procurement wants to preserve supplier relationships. Deferred payment lets you keep both sides happy, without compromising either.

3. Finance teams drowning in manual payment prioritization?

Automating deferral rules through your ERP or TMS frees up time – so your team can focus on strategy, not spreadsheets.

How Aria Makes Payment With Terms Seamless 

Let’s be real: traditional bank solutions? Often slow. Often rigid. Often built for someone else’s reality.

That’s why we built Aria differently:

• Direct connection to your tools (ERP, P2P, TMS): No manual re-entry, invoices are automated and processed with one click.
• All suppliers eligible: Even your smallest suppliers can benefit from extended payment terms, with no minimum amounts.
• Up to 90 days to pay, but your suppliers get paid immediately.

The result? You control your cash. You secure your supply chain. You grow – without friction.

FAQ – Everything About Deferred B2B Payment

Still hesitating? Here are answers to questions we hear most often:

What does “deferred payment” mean for a business?

You pay your suppliers today, but your cash stays put for a while. You gain flexibility without sacrificing reliability.

What’s the value of extended payment terms?

They help you align outgoing payments with your cash cycle. That builds resilience in a volatile market.

How does it impact supplier relationships?

Positively. With instant settlement guaranteed (by a partner like Aria), suppliers gain trust – and often offer better terms in return.

How do Aria’s extended payment terms differ from traditional banking solutions?

Banks require guarantees, financial covenants, and exclude small suppliers. Aria, conversely, offers broad eligibility, no minimum amounts, and automates the entire process via your existing ERP or TMS.

Do I keep control over the payments?

Absolutely. You define the rules – what to defer, when, and how much. Aria executes according to your logic.

Can I activate extended payment terms invoice by invoice?

Yes. Select per invoice or apply rules at scale. Everything’s managed inside your existing ERP – no extra tools, no extra clicks.