What legal framework should be used in B2B relationships?
B2B payment terms encompass all payment terms, payment deadlines, and penalties for non-compliance with contractual commitments.
The Economic Modernization Act
The Economic Modernization Act (LME), embodied by Law No. 2008-776 of September 4, 2008, was designed to reduce payment times and secure commercial relationships between companies. Pursuant to the provisions of this law, reinforced by Articles L441-10 and L441-11 of the French Commercial Code, the default payment term is set at 30 days from the invoice issuance, or 45/60 days from the end of the month, depending on industry agreements.
Failure to comply with these deadlines may result in financial penalties. Late payment interest and penalties are added to the initial amount due, in accordance with the French Commercial Code. Furthermore, authorities such as the DGCCRF (Directorate General for the Coordination of Financial Affairs and the French National Directorate General for Finance) ensure the proper application of these rules through regular inspections and verifications.
Towards strengthened regulation
Faced with persistent disruptions and socio-economic events, new legislative initiatives are being considered to further strengthen the regulation of B2B payment terms. Several national and European bills are currently under consideration to harmonize the applicable rules, with the aim of further protecting businesses weakened by these delays.
While this harmonization represents an opportunity to create a healthier business environment, it also requires companies to review their internal and external processes (traceability of transactions, documentation, controls, etc.).
B2B Regulation: conditions for boosting your commercial strategy
Clearly formalizing payment terms in general sales agreements is an essential step in regulating commercial transactions.
Choosing and negotiating appropriate payment terms
The first step is to define payment terms that are tailored to the company’s cash flow needs, the specific characteristics of each client, and their payment capacity.
Commonly adopted options include:
- Cash payment: payment on the day of the order, receipt of the invoice, delivery, or performance of the service.
- Default payment term: payment 30 days after receipt of the goods or performance of the service.
- Negotiated payment term: payment 45 or 60 days after invoice issuance.
The chosen payment method must be accompanied by defined payment methods, such as bank transfer, credit card payment, or direct debit, as well as a transactional channel (internal payment portal, payment link integrated into the invoice, payment form on the website, etc.) facilitating payment within the agreed deadlines.
Furthermore, to maximize the protection of its interests and strengthen control over its receivables, the company can include payment clauses in its general terms and conditions of sale – in the form of incentive discounts or financial penalties.
The importance of effectively following up with customers
Even with carefully negotiated payment terms, rigorous follow-up remains essential. Effectively following up with customers significantly reduces late payments and non-payments, while strengthening business relationships.
A few keys to facilitate its implementation:
- Reminder schedule: Establish a precise schedule including an initial reminder, followed by successive reminders, and, if necessary, escalation to more stringent procedures.
- Definition of reminder scripts and templates: Develop messages tailored to each customer profile and train finance and sales teams in collection techniques.
- Monitoring tools and indicators: Use reporting tools to measure DSO and the non-payment rate, centralized within an ERP.
Which technological solutions should you rely on?
To improve the efficiency of their B2B payment terms, companies have a wide range of solutions at their disposal, all part of a comprehensive optimization approach, combining digitalization and process automation.
Digitization of accounts receivable
In recent years, business management tools have undergone considerable modernization. Some ERP suites and software now include scoring features, assessing customer solvency in real time, allowing companies to anticipate risks and adjust their strategies accordingly.
To go further, new B2B payment services are emerging, enriching companies’ banking and financial offerings. They centralize collection tracking and automate all management tasks—from scheduled reminders based on predefined deadlines to proactive customer communication and systematic payment and invoice reconciliation. These tools integrate natively with business systems such as ERPs or CMSs, preserving companies’ working habits.
Immediate and automated payment methods
To speed up the receipt of customer payments, many companies are reviewing their collection strategy. They are prioritizing immediate and/or self-initiated payment alternatives. These mechanisms reduce manual intervention by the debtor and accelerate transactions to limit the risk of non-payment.
These B2B payment solutions include:
- Immediate payment: With instant credit transfer (ISCT), funds are transferred in real time to the company’s account, as soon as the transaction is validated.
- Payment initiation: This payment system (PIS) allows the company to initiate a transfer in the debtor’s banking account, which only needs to be validated. This type of transfer is not subject to dispute.
- Direct Debit: Direct debit technologies (SEPA or bank card) ensure the collection of recurring invoices according to the agreed deadlines.
These new solutions require adjustments to internal processes as well as existing contractual payment terms.
The rise of new B2B payment services
The evolution of financial technologies is also paving the way for new inter-professional payment models, which streamline payments and protect cash flow:
- B2B Split Payment: This mechanism allows invoice payments to be split into several installments, thus facilitating cash flow management for both the customer and the company.
- Credit Insurance: By guaranteeing payment in the event of customer default, credit insurance significantly reduces the risk of non-payment and secures transactions.
- Factoring: Incorporating cutting-edge technologies, this B2B financing method offers speed and flexibility, while ensuring optimal integration with management systems.
Compared to traditional methods, these models often allow for more efficient management of customer payments, both in terms of speed and security. However, they still require adapting internal processes and may incur specific service fees.
Optimizing B2B payment terms relies on a combination of a solid legal framework, a well-developed business strategy, and innovative technological solutions. This approach secures companies’ cash flow, right from the contractualization phase of the commercial relationship.
To remain competitive in a constantly changing economic environment, companies must equip themselves with B2B payment solutions integrated with ERP and accounting systems. These tools streamline collection and the proactive management of customer receivables. Furthermore, support from a consulting firm specializing in credit management is often essential to optimize processes and anticipate risks.
¹ Altares – Étude de défaillances et sauvegardes des entreprises en France (2024)
