How B2B BNPL for SaaS benefits sales and finance leaders

Jonah Remz
Jonah Remz
Head of Finance
Posted on
May 11, 2023
min read
How B2B BNPL for SaaS benefits sales and finance leaders

In a rush? Download a summary of benefits for sales leaders here and benefits for finance leaders here.

As the economic downturn and volatile market conditions change the world of SaaS, many SaaS businesses are finding it harder and harder to secure the cash they need to survive and grow. With both VC investors and customers running low on cash they’re willing to give out, many SaaS companies are finding their sales cycles getting longer, runways shrinking, and cash flow drying up.

No one feels the squeeze quite as much as sales and finance leaders. With sales directly responsible for generating revenue, and finance directly responsible for ensuring revenue is spent and saved correctly, these two teams are the first ones everyone turns on when things get difficult. 

This can put these teams in an impossible position—after all, you’re just people, not miracle workers. Even the best sales and finance leaders can’t save a product that just doesn’t make sense, or counteract an economy where customers simply can’t afford your product.

Typically, problems with revenue, cash flow, and low conversions are solved by making compromises like:

  • Majorly changing or restructuring the product itself.
  • Pivoting on marketing initiatives, your brand identity, your target market, sales processes, or other key aspects of your overall approach to finding and soliciting leads. 
  • Changing the pricing structure to make it more competitive, like selling in low-cost short-term contracts, offering big discounts on one-time upfront payments, or allowing customers to pay in installments.
  • Cutting costs in other places to make up for lost revenue from bad sales performance. 

But, these compromises rarely offer a solution and often create more problems than they solve. Completely redoing your product or core marketing strategy can lead to weakening your product and overall brand reputation, or pivoting into approaches that don’t make sense with your long-term vision. Likewise, changing your pricing to be more affordable inevitably leads to issues like increased churn and lower revenue, while cutting costs can result in removing things you needed more than you thought you did. 

Fortunately, there’s one thing that can solve many of the problems sales and finance teams in SaaS companies face, without requiring massive changes to your product, company, pricing, or strategies. BNPL for SaaS is a great middle-ground that can increase revenue, shorten sales cycles, and make customers happy—while creating less work for sales and finance teams.

What is B2B BNPL for SaaS?

BNPL, or buy now pay later, is a payment option that allows customers to purchase products or services and pay for them over a set period of time, rather than paying the full amount upfront. It has become incredibly popular in the B2C space in the past several years for its positive impact on cart abandonment, sales, and revenue generation, and it can provide many of the same effects to the B2B space—particularly the B2B SaaS space.

A B2B BNPL provider works by acting as a third-party payment processor and financier that integrates into the B2B sales process. Instead of requiring a customer to pay for the full cost of the product they’re purchasing upfront, a vendor can present them with the BNPL option, which allows them to pay in comfortable installments over weeks or months. As soon as the customer agrees to the terms, they get to access the product in full, while the vendor gets paid the full value of their purchase up front.

In SaaS, this would typically work in scenarios where the SaaS company is offering an annual or long-term contract, but the buyer can’t afford to pay the full contract value in one upfront payment. With a B2B BNPL solution, the buyer can agree to the long-term contract and pay in more affordable installments, while the vendor gets to walk away with the full value of the contract upfront—the same as they would if the buyer had paid for it in full themselves.

This arrangement makes both parties happy: The customer gets to preserve their cash flow by paying over time, while the vendor gets to maximize their cash flow by getting the full payment for a high-value deal.

5 benefits B2B BNPL can provide for SaaS finance leaders

Implementing a B2B BNPL for SaaS solution into your sales process can provide a host of benefits for your entire company, including increased revenue, better cash flow, happier customers, and a host of other positive effects. However, finance leaders and their teams will be particularly happy with the following 5 benefits. 

1. Increased working capital

B2B BNPL can provide a double benefit on your overall cash flow and revenue. The first is that it increases your immediate access to cash because it allows you to access the full contract value of each deal as soon as it closes—even if the customer doesn’t pay off the cost for months. 

Second, since the lower upfront fee makes your product more affordable in the short term without affecting the total long-term value, B2B BNPL allows you to cast a wider net, attract more customers, and close more deals.

When both of these effects are felt, the bottom line is an increase in overall cash flow, as well as an increase in your immediate access to working capital. This means that you have more money to allocate to important expenses, add to your runway, or invest in new growth opportunities. 

2. Higher ACV and LTV 

When steep upfront costs aren’t an obstacle, more buyers tend to agree to long-term, high-value contracts. With B2B BNPL, you can essentially offer long-term contracts for short-term upfront prices. That means you can combine the best of both worlds: the higher conversions and shorter sales cycles of short-term contracts, and the low churn and high ACV of long-term contracts.

Lower upfront costs also tend to encourage existing customers to renew their contracts instead of opting for competitors. This is especially true when you have customers who have fluctuating revenue, or who are in a worse financial position at the time of renewal than they were when they initially signed up. More renewals mean less churn and higher LTV.

Together, the higher ACV and LTV from B2B BNPL not only looks good on your balance sheet, it also typically comes with a boost in overall revenue and pipeline predictability as well. 

3. Easier billing and collections 

Tired of spending hours each week creating invoices, sending payment reminders, tracking down delinquencies, and dealing with other payment monitoring busywork? B2B BNPL providers take care of all your billing and collections for you for every single transaction that goes through the platform.

By combining the increased cash flow B2B BNPL provides with the time saved from eliminating billing and collections busy work, your team is free to work on more important things that build your business.

4. No discounts necessary 

Offering discounts on annual contracts is a common practice to incentivize customers to commit to longer-term deals. However, there’s a major downside to this approach: It can often result in a net negative on your balance sheet, as the revenue generated from the contract may not be enough to cover the cost of the discount. And even if the result isn’t that bad, it still amounts to a huge chunk of lost revenue—especially when multiplied across dozens or hundreds of deals.

With the lower upfront cost that B2B BNPL provides, you can accomplish the conversion goal of discounts without having to lose revenue. Since it feels like a discount to customers and incentives customers to buy who otherwise can’t afford your product, your company can get more conversions and satisfy the needs of both you and your customers. 

This will help make your job easier, as it gives you more money to work with, and of course, it also helps your company avoid the perception that your product is only worth purchasing when offered at a lower price—something that can negatively impact the business in the long run.

5. Avoid extra debt 

Another less common way that SaaS companies encourage buyers to make purchases is by offering an installment payment option. This is typically done in two ways. One is by retrofitting a B2C BNPL product or another type of loan product into the B2B sales process, which can be clunky, error-prone, and confusing for both vendors and buyers. The other is by offering the payment plan directly, which means that the vendor is essentially acting as a lender and taking on the risk of default. This can result in added debt and financial instability for the business, and can also be superbly time-consuming and costly to create and manage. 

B2B BNPL allows vendors to get the benefits of offering installment payments, without any of the added complications, financial burden, or time commitment. Since B2B BNPL providers lend to the customer, they take on the debt and the responsibility of ensuring the customer pays.

B2B BNPL also prevents debt in another way: By boosting overall revenue and upfront access to working capital, it can help you extend your runway and finance your company’s operations and growth, without the need to reach out to investors or debt lenders. This can be a great lifeline for early-stage companies who need to tide themselves over in between funding rounds.

5 benefits B2B BNPL can provide for SaaS sales leaders

Finance teams aren’t the only ones whose lives would become easier with a B2B BNPL solution. Sales teams, who are often equally targeted when times get hard, could also see many benefits from something like B2B BNPL. Here are the top 5 improvements sales leaders and their teams would experience with a BNPL solution.

1. Decreased friction

Friction is one of the biggest headaches sales teams want to reduce: When a customer is arguing against your price, product, scheduling, and every other little point of interest, sales cycles can drag on for months and both parties can get exhausted.

Fortunately, B2B BNPL can smooth out multiple points of friction, with the biggest one being price. By eliminating the financial barrier of a high upfront cost, B2B BNPL can remove budget restraints from the conversation, and make it much easier for customers to agree to a deal. 

B2B BNPL also smooths out friction related to payments, setting terms, and billing as well. Because the built-in portal allows for customizable terms, automated payments, and automated billing and collections, both the buyer and the vendor can save countless hours troubleshooting problems or negotiating terms. 

2. Close deals faster

One of the biggest quantifiable metrics of how well a sales team, and by extension, a company is doing, is how fast your sales cycles are. B2B SaaS sales cycles are notoriously slow, with the average one being about 84 days—the equivalent of nearly 3 months. This can be a problem for companies that are low on cash and need to get more quickly.

B2B BNPL is proven to make SaaS sales cycles much shorter, with one B2B BNPL customer seeing a reduction in length by 50%. This is because high upfront costs—the biggest reason for delays, hemming and hawing, and prolonged negotiations—is eliminated. When buyers have the opportunity to preserve cash flow and get full access to the product without paying full price immediately, they’re usually a lot more willing to close the deal and get started reaping the benefits of your product immediately.

3. Increased conversions and renewals

Another benefit of drastically reducing the upfront financial commitment of a contract with B2B BNPL is that you can significantly expand your pool of potential customers. When the upfront payment gets slashed from $50,000 to $5,000, many more people will be open to buying your product, simply because they can afford it now. 

This is especially useful for vendors operating in industries where customers have seasonal businesses, tight margins, or erratic access to cash. Many businesses don’t have large sums of money sitting around, but they can easily afford payments spaced out over months. 

B2B BNPL also increases contract renewals for the same reason. Customers who may be on the fence about renewing because of the large financial commitment or because their financial situation has changed since they first signed on are much more likely to renew when the effect on their wallet isn’t as great. 

4. Close more high-value deals

Another benefit of removing the high upfront cost for buyers is that it helps sales teams close more high-value deals. Instead of needing to offer cheaper short-term contracts, discounts, or other buying incentives that ultimately reduce revenue, B2B BNPL solutions help make high-value long-term contracts easy and affordable.

With BNPL for SaaS, you can close deals for high-value contracts that would’ve otherwise been impossible to close or would’ve required some serious time-consuming negotiating to close. This means more revenue for your company and more commissions for your sales team. 

5. Negotiate terms—not price

Price is often one of the most time-consuming and delicate points of negotiation: If the deal takes too long or if the negotiation isn’t done just right, the buyer can easily walk, making a deal that took weeks or months of work completely unproductive.

B2B BNPL solutions can help sales teams shift their focus from negotiating the price to negotiating product, delivery terms, and other variables—factors that are usually more low-stakes and easy to handle. When potential buyers are no longer constrained by concern over the affordability or fairness of a steep upfront payment, negotiations can center around the product's value, features, and quality, as well as the timeline and delivery options.

This can result in more meaningful discussions and deeper engagement that can become useful feedback to other teams like product and marketing. It also leads to faster, less stressful, and more successful deals, and eliminates the need for sales teams to spend time and energy on calculating custom payment plans, interest rates, or financing options. Instead, they can focus on building relationships with potential buyers, understanding their needs and concerns, and crafting offers that meet those needs.

Start reaping the benefits of B2B BNPL with Capchase Pay

So how do you choose the right B2B BNPL provider so you can start experiencing these benefits on your own team? One great B2B BNPL solution that was built with the SaaS audience in mind is Capchase Pay

How does Capchase Pay work?

Capchase Pay is a B2B BNPL solution that was built to address the specific concerns of B2B SaaS companies that offer annual, multi-year, or other long-term contracts.

Capchase Pay can be customized to fit your customer’s unique needs, whether that means setting up monthly, quarterly, or yearly installment payments. It can seamlessly be added to your existing sales process by integrating with Salesforce, Hubspot, and other popular CRMs, and it also takes care of all billing and collections for you.

All vendors have to do is set up the payment terms and details of the deal within the vendor portal, then send a link to their buyer. From there, the buyer can agree to the terms of the deal, submit their first payment, and set the rest of their payments up to be submitted automatically. 

Then, the BNPL solution sends the vendor the full value of the contract upfront for immediate access, while the buyer gets to enjoy paying in affordable installments. They can always check their progress and the status of their payments through their buyer portal. 

What can Capchase Pay do for my company?

With Capchase Pay, your company can enjoy:

  • Faster sales cycles without sacrificing ACV.
  • Lower CAC and churn rates.
  • Increased customer LTV.
  • More conversions and renewals for high-value deals.
  • More overall revenue, with immediate access to working capital.
  • Less friction and time spent on negotiations.

For example, within just one month of using Capchase Pay, B2B lead generation CIENCE was able to:

  • Cut its sales cycle from 4 weeks to 2 weeks.
  • Generate $3.7 million in pipeline.
  • Pivot from 90-day contracts to annual contracts.
  • Increase conversions on high-value deals from single digits to 50. 

Have an ACV of $5,000 or more? Get started with Capchase Pay now

If you’re a finance leader or sales leader looking to increase both your team and your company’s revenue, conversions, and overall success, a B2B BNPL solution like Capchase Pay may just be the perfect solution. 

To get started, all we ask is that you have an ACV of over $5,000. You can learn more about Capchase Pay here, or schedule a chat with our team here.