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In Conversation With...bePayd

In the third episode of In Conversation With…xDesign Managing Director, Ben Hutton, talks with Anthony Persse, Financial Solutions Director at bePayd about how businesses can support their supply chains by offering immediate payment through bePayd (instead of the usual 30, 60 or 90-day invoice cycle) and the challenges of managing and receiving payments in a crisis.

Ben and Anthony talk about how bePayd can fit into an economic recession and about being able to unlock the hundreds of thousands of pounds that are currently tied up in unpaid invoices.

Can you introduce bePayd to us and tell us how you fit into the market and what you do?

Sure, so bePayd works with large organisations that want to support their supply chain and we do this by helping their suppliers get paid sooner than they otherwise would have. Why this is important is because, and you’ll know this, when one business trades with another they offer goods and services and when they provide those goods and services, they’ll send an invoice and then probably have to wait 30, 60, 90 days or whatever the trade terms are to get paid. After invoicing they probably don’t know when they’ll get paid, if the invoice is approved for payment and things like this, which can be quite worrying for that organisation. Then they spend a huge amount of time chasing and asking when they’re going to get paid, how much they’re going to get paid. If you imagine that you knew when you were going to get paid, how much and knew it straight away and you had the option for an early payment, that would be a good thing. We effectively tell a supplier when their invoice has been accepted, when they’ll get paid and how much they’ll get and by the way, if you want it sooner, you can. We do that and make an offer of payment they can accept in as little as 3 clicks.

So the customer uses your platform to offer other suppliers the chance to get paid earlier in return for a small discount and then you pay the invoice and then you must get, presumably, paid on the original date. Is that how it works?

That’s a great question. It works in one of two ways. The first way is that we can pay the invoice and the customer pays us on the original day, as you’ve just pointed out. But for some customers they might have their own liquidity, so they might say we don’t want you getting a discount and we want to control that discount so we want to use our own liquidity to pay our suppliers early to benefit from the discount ourselves. So we can offer both of those models. It works really well for the supplier and for the buyer who has lots of cash and the buyer who is strapped for cash.

As you pointed out, I’m a business owner and through Covid-19 every business has been affected by late or delayed payments, does that mirror what you saw?

Yeah, and so look, don’t take it personally, I think it happened quite a lot and there’s a number of things we also saw and the large customer is also suffering, not only did they not have the people to make the payments and do all of the normal approve processes, but they were also struggling with their own cash flow, potentially. A number of them were saying we were going to have to extend your terms and that makes life even worse for the supplier. We believe they should have engaged us and we could have softened the blow or taken the heat out of the extension of terms while also supporting the buying organisation with their own cash flows.

On one hand, you must have more people looking for ways to get paid earlier and then on the hand there are less business payments being made. How has this affected your business?

Just to be clear, where we are: we are early in our build. It went live in Feb and we had a number of large organisations that were keen to take it up and deploy and support their supply chains and then the crisis hit. Those organisations then had other things to focus on and were going to come back to us but it made us think that this was something that could genuinely help people now, so let’s drive awareness and that’s effectively what we’ve been doing. At the start, a cold call or email from us wasn’t going to cut it because everyone was in crisis mode but just now we’ve literally started to get decent traction with local government, central government and the private sector. Launching a product right before a pandemic is quite something. Obviously it's a terrible thing but as any business needs to do, we need to be flexible to survive and hopefully it's focussed every business on every penny mattering and about knowing when you’re going to get paid to be even more important. I would have to say, how do you avoid the slippery slope of having companies get addicted to discounts for paying for services that they already agreed a price to? Many already will be and they will be through solutions like invoice discounting and factoring and things like this. What we’ve done is created a mechanism that is so simple to get paid sooner and the discounts are nominal and if the buyer funds it, they can dictate what that discount is and support the supply chain however they wish. But because it’s so simple, the time saving that that entity can create vs traditional funding is so great it's a huge cost benefit. This extract has been edited for length and clarity. Watch the full version of their conversation here.