Billhop

Healthy working capital is integral for enhancing financial resilience and operational excellence in businesses. While avenues like bank loans, venture capital, and personal assets remain reliable choices for entrepreneurs and business leaders, the inherent approval complexities pertaining to these traditional methods present challenges during critical times. In the prevailing environment of inflation and escalating interest rates, the resultant lack of financial agility equates to missed opportunities, putting businesses in a tough spot.

Corporate credit cards can serve as an alternative, versatile tool for businesses seeking to improve their finances without reducing cash reserves.

As Ingemar Sjögren, CFO of Billhop, says, “Pivoting to card-based transactions is an effective way for companies to smooth out cash flow irregularities, gain process efficiencies, and improve working capital. Organizations can make their B2B value chains flexible and resilient, ensuring a seamless day-to-day operation while benefitting suppliers.” Billhop, an industry-leading payment service and solution provider, is set on revolutionizing the way businesses pay one another in the European Economic Area (EEA). At its core, the company focuses on helping enterprise clients pay their various operating expenses through credit card transactions. Billhop’s strategic partnerships with premium financial service providers and banking partners across Europe allow it to go beyond the confines of a typical payment services provider and bring a new paradigm to business transactions.

From managing strategic spending to paying onetime, low-value suppliers without onboarding them, it covers all avenues of payment across the procurement spectrum. The immense benefits are rendered through Billhop’s Working Capital and Tail Spend solutions.

Unleashing the Full Potential of Commercial Cards

Organizations opting for a card from Billhop’s networks can customize their credit card benefits to suit their business operation. From bespoke credit facilities and payment terms to setting up transaction authorizations, clients can retain complete control over their accounts payable spending. They can also make deferred payments for up to several weeks (offered by the issuer of the credit card).

“Suppliers often incentivize early payments with discounts, such as a five percent reduction, if, for instance, a one million Euro invoice is settled in 10 days. However, this advantage inadvertently leads to premature cash-out events; what if you could pay early whilst preserving the cash at the same time?” says Sjögren.

Billhop has designed its working capital financing product to help businesses easily navigate the early payment intricacies and take full advantage of the card provider’s interest-free payment period.

The platform streamlines early payments, incurring a service fee on invoice amounts, while clients enjoy an interest-free grace period to settle credit card statements. Instead of paying the suppliers using a bank-to-bank transfer, purchasers can settle accounts payable on the 10th day by credit card, securing the e.g. 5 percent suppliers’ discount*.

This approach allows clients to benefit from supplier discounts and preserve cash balance, essentially yielding an arbitrage equal to the difference between the offered early payment discounts and the Billhop service fee. From the corporate finance perspective, Billhop seamlessly enhances working capital, preserves cash, and has a positive effect on the return on equity, thereby providing an efficient and advantageous financial solution.

The highly intuitive platform integrates with enterprisegrade ERPs, allowing businesses to automate card transactions. Users can leverage the platform’s API and Secure File Transfer Protocol (SFTP) connectivity to effortlessly pay any supplier— especially the no-card-accepting ones with credit cards.

In parallel, the working capital product is packaged with top-notch, industry-leading security capabilities to ensure transactions are quick and safe with Billhop.

“From a governance standpoint, we focus on seamlessly aligning approval processes with our systems, ensuring compatibility and robust communications with ERPs. A client should not need to change their approval processes to use our platform. Furthermore, our commitment to security is reinforced by our SOC 2 Type II audit for information security,” says Sjögren. “As a payment institute under the supervision of the Swedish Financial Services Authority, we are able to onboard clients throughout the EEA.”

All these capabilities make the Working Capital a preferred pick for easier strategic spend management. Billhop’s Tail Spend platform features the same advantage yet specializes in untangling the knots of unplanned and miscellaneous daily business operations.

Tail End Spending Simplified

The Tail Spend platform presents an excellent alternative to cumbersome processes that were previously developed to enhance information security and prevent payment-related fraud. It’s designed to bring transparency and efficiency into day-to-day, low-ticket transactions while enabling clients to effortlessly make one-time purchases without onboarding new suppliers onto ERP systems. The platform’s financial advantage far outweighs internal processing costs.

For example, Billhop typically processes smaller invoices up to 10,000 Euros for a nominal fee of the transaction amount. This entails card charging, receiving funds from the acquirer, and settling the transactions through bank-to-bank transfers. If 500 Euros is the internal process cost for adding a supplier to the ERP systems, paying 300 Euros* using Billhop becomes a financially sensible decision. This approach guarantees timely payments, eliminates internal processing costs, and ensures ontime, in-full payments (OTIF), making it a pragmatic choice for businesses.

“We can charge any type of credit card, make payments in a wealth of local currencies, and our settlement reach is global,” says Sjögren.

Billhop facilitates constant communication between card issuers and enterprise clients to ensure uninterrupted operations. As a result, it provides direct integration with expense management systems, giving a bird’s-eye view into purchases and suppliers’ interactions. This establishes a clear audit trail for the enterprise.

It also offers various products built with a range of options to efficiently facilitate invoice payments via card for enterprise clients to accommodate all payment methods. Connections have been established with supply chain management platforms, enabling payments for tail-end and working capital financing without requiring direct login to Billhop.

Unmatched Client Focus

The profound abilities of Billhop’s dual Working Capital and Tail Spend solutions position it as a powerhouse in meeting the diverse needs of businesses across various industries, including industries like financial services, oil and gas, general manufacturing, pharmaceuticals, and logistics.

For instance, a major global financial institution joined Billhop to improve payment processes and decentralize responsibility for indirect spending items. They aimed to expedite credit card payments and started using Billhop as their primary method for settling tail-end invoices across their European operations. The firm gained massive operational efficiency in handling low-value transactions through the Tail Spend platform and reduced significant operational burdens.

The client witnessed similar success in the working capital domain, achieving notable reductions in working capital and preserving millions of Euros during pivotal financial periods.

Billhop stands a notch above in supply chain financing, providing businesses with an intuitive experience and flexibility. Clients appreciate the pay-as-you-go model, which allows them to use the service as needed without long-term commitments or guarantees. This adaptability positions the company as a preferred choice in supply chain financing.

Enterprises can seamlessly transition to Billhop’s solution without revamping existing policies and procedures. The platform can mirror their governance processes, covering a vast majority of known client processes, including governance authorities, SFTP solutions, and ERP integrations. Companies using Billhop to manage their Tail Spend can involve hundreds or thousands of employees daily to pay tail-end invoices with cards, regardless of seasonal demands.

On the other hand, clients using Billhop as a Working Capital solution can effortlessly navigate volume spikes during quarter ends, when companies showcase their cash preservation capabilities.

Paving the Path to Easy, Safer B2B Payments

Building on its product efficacy, Billhop aims to be a catalyst for better expense management. It is at the forefront of reshaping financial strategies in the face of rising interest rates. Over the past decade, it has played a pivotal role in raising companies’ awareness of the cost of capital. In the ever-growing European business landscape, the company foresees a future trend of dynamic discounting in supply flows and facilitating fast payments. In both low- and high-interest rate futures, Billhop’s market position as a provider of card enablement for B2B payments in Europe will continue to gain prominence among businesses navigating their financial landscapes