What Are Business Instalment Payments?
Business instalment payments let a business customer split an invoice into scheduled payments instead of paying the full amount in one go. With PaidTerms, suppliers can offer this either alongside their existing payment collection process, or with the invoice funded upfront by PaidTerms while the customer repays over time.
What Does "Business Instalment Payments" Mean?
Business instalment payments allow a business customer to pay an invoice in a series of smaller, scheduled payments rather than as one lump sum. Instead of paying everything upfront, or waiting under a standard trade account with a single due date, the buyer repays the invoice in agreed instalments, typically monthly.
This is sometimes referred to as B2B Buy Now, Pay Later, but "instalment payments" or "flexible payments" is the clearer description of what is actually happening: an invoice divided into manageable parts, agreed and scheduled in advance.
How Business Instalment Payments Work
The mechanics are straightforward, though the detail depends on which side of the transaction is carrying the payment schedule.
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The supplier issues an invoice A business purchases goods or services and receives an invoice as normal, often through Xero.
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The buyer is offered an instalment option Instead of paying the full invoice immediately, the buyer can choose to spread the cost, typically over 3, 6 or 9 months.
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The buyer completes a short application Eligible customers are approved quickly and shown the repayment schedule and any fee before confirming.
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Payments follow the agreed schedule The buyer pays each instalment on the dates agreed, and the supplier is paid either as instalments come in, or upfront in full, depending on which PaidTerms option the supplier uses.
The Buyer's Experience
For a business customer, instalment payments solve a common problem: the goods or services are needed now, but paying the full invoice immediately would tie up working capital needed elsewhere.
- Spread the cost of a larger invoice across a manageable schedule
- See the full repayment schedule and any fee before agreeing to anything
- Apply online, with approval usually taking only a few minutes
The Supplier's Experience
For a supplier, instalment payments offer another option alongside asking for payment upfront or extending a trade account, without having to informally finance the customer themselves.
- Offer flexibility to customers without manually managing a payment plan
- Choose between collecting instalments over time (Pro) or being paid upfront in full (Capital)
- Keep the invoicing process inside Xero rather than running a separate system
Instalments Compared With Traditional Payment Terms
A traditional trade account gives a customer a single due date, often 20th of the month following, or a fixed number of days after the invoice date. Instalment payments replace that single due date with a series of smaller, scheduled payments.
| Feature | Traditional Trade Account | Business Instalment Payments |
|---|---|---|
| Payment structure | One lump sum on a set due date | Scheduled instalments |
| Supplier settlement | After the full term, if paid on time | As instalments land, or upfront with Capital |
| Customer application | Account application, often once | Quick approval per invoice or account |
| Visibility of schedule | Single due date | Full schedule shown upfront |
When Business Instalments May Be Useful
Instalment payments tend to make the most sense where an invoice is large enough that paying it in one go is a genuine decision point for the buyer, not just a formality.
- Larger orders where the buyer would otherwise reduce the order size to fit their available cash
- Suppliers who want to offer flexibility without extending their own informal credit
- Repeat business customers who value predictable, scheduled payments over an open-ended account
- Sales conversations where price is not the obstacle, but timing of payment is
Small, routine invoices are usually simplest paid upfront or on standard terms. See how business instalment payments work in New Zealand for a practical walkthrough.
How PaidTerms Fits Into the Process
PaidTerms is a New Zealand payment platform that connects to Xero and lets suppliers offer instalment payments on eligible invoices, either through PaidTerms Pro or PaidTerms Capital.
Rather than treating instalments as a separate finance process bolted onto the sale, PaidTerms is designed to sit inside the normal invoicing workflow. This is the idea behind embedded instalments: payment flexibility as part of the quote or invoice itself, not a conversation that only starts once an invoice is overdue.
Frequently Asked Questions
Are business instalment payments the same as a loan?
No. Instalment payments apply to a specific invoice and are repaid on a fixed schedule agreed upfront, not a general-purpose business loan or line of credit.
How is this different from a normal trade account?
A trade account usually has one due date and leaves the supplier carrying the risk until payment arrives. Instalment payments replace that single due date with a defined schedule, and with PaidTerms Capital the supplier can be paid upfront while PaidTerms manages the customer's repayments.
Is there a fee for using instalment payments?
Yes. PaidTerms charges a fee, shown clearly before anyone commits to a schedule. Speak with an accountant about how it applies to your business.
See How PaidTerms Works
PaidTerms helps New Zealand suppliers offer business instalment payments without having to build or manage the process themselves.
Read next: how business instalment payments work in New Zealand, or see what embedded instalments are and where they fit in your sales process.
