What is Buy Now, Pay Later (and How Does it Work)?

In the consumer world, having the option to spread costs over monthly payments has become the norm. Through providers like Klarna, buyers can buy everything from electronics and furniture to flights and expensive clothing, and break it up into smaller, more manageable payments.

Trade industries have taken longer to adapt. Traditionally, a large and unexpected bill that a customer couldn’t pay would have meant lost business – a buyer saying “I’ll think about it” and shopping with a competitor, or making a credit arrangement that works for the customer but less so for the merchant.

With the introduction of Buy Now, Pay Later, trade businesses now have another flexible payment method to meet the demands of customers. Here’s how it works.

What is Buy Now, Pay Later?

Buy Now, Pay Later (BNPL) lets customers receive goods/services at the point of sale and pay in instalments or after a set period.

Crucially, unlike trade credit, the merchant gets paid upfront – with no credit risk.

How does BNPL work?

The process for BNPL is simple and works as follows:

• At the checkout, a customer selects BNPL, and fills in details e.g. name, address, card details for repayment.
• The BNPL provider (e.g. Klarna) makes an instant credit decision, which is approved in seconds.
• The customer selects a payment plan that suits their needs and completes the checkout process.
• The merchant receives the full payment upfront.
• The BNPL provider collects from the customer via their chosen plan e.g. the next two instalments are automatically charged every 30 days.

Why BNPL matters for trade businesses

Customer expectations are changing

Modern consumers are accustomed to transactions that feel convenient and effortless. Nearly two-thirds of shoppers still struggle with manually entering their card details, and 25% of carts are abandoned because checkout feels to slow and complicated.

These high expectations aren’t reserved for everyday purchases. Customers today are less patient, and they expect the same level of experience, whether they’re paying for groceries or ordering a large item for their business via a merchant.

Balancing customer demand and cash flow

Most trade businesses didn't set out to become credit controllers. Yet many spend valuable time managing overdue invoices and chasing payments.

Customers want flexibility and longer payment terms, while merchants need confidence they'll be paid on time. Get the balance wrong and the merchant either takes on more risk or risk losing business.

BNPL helps solve both sides of the problem. Customers get extra time to pay and keep cash available for other priorities, while merchants can get paid quickly without the risk and effort that often comes with offering credit.

Instead of spending time managing payments, businesses can focus on serving customers and growing sales.

How BNPL benefits customers

• Spread the cost of a big job without a credit card
  Customers don’t always have a credit card available, and even if they do, they may not want to use a significant portion of their credit limit on a single purchase.
  With BNPL, they have another way to manage large expenses, by splitting the cost into smaller and more manageable instalments.
• No upfront cash needed, useful for unexpected bills and large purchases
  Some bills, like a breakdown, you can’t prepare for. For instance, customers who are reliant on using their car every day, can spread the cost of repairs means they can get back on the road faster – instead of having to pay a hefty bill upfront or wait until payday to get the problem sorted.
• Customers get net terms at checkout with a prior account relationship
  While credit is common in many trade industries, a business will usually need to build trust before offering payment terms. A regular garage customer, for instance, is more likely to be offered credit than someone visiting for the first time.
  With BNPL, customers can access the benefits of longer, flexible payments at the point of sale – without having to open a trade account or build a payment history with the merchant first.
• Instant decision on credit
  For large bills, buyers short on cash often opt for finance arrangements.
  Instead of filling out forms, shopping around for providers to find the best offering, speaking to a lender and waiting days for approval, customers who use BNPL receive a response online within seconds, allowing them to complete their purchase straight away

How BNPL benefits merchants

• Secure bigger jobs and get paid upfront
  According to a Klipboard survey of UK distribution companies, 94% believe offering multiple payment options boosts customer loyalty. In other words, trade businesses are keen to offer flexibility to win over customers.
  However, some traditional payment arrangements can result in these firms taking on additional financial risk.
  Offering BNPL gives customers the flexibility they want, while the merchant still receives the full payment upfront.
  This can help businesses secure larger orders and win jobs that might otherwise be lost because a customer doesn't have the cash available straight away.
  Merchants get the certainty of knowing the job is confirmed, and payment isn't dependent on an invoice being settled weeks later.
• No credit risk
  ‍If a business offers its own payment terms to provide flexibility to customers, it takes on the responsibility of collecting the money and managing the risk of late or missed payments.
  Using BNPL shifts that responsibility to the provider, protecting merchant from bad debt and risk of late payment that impact their cashflow and profit.
• Less admin required
  ‍Trade credit deals may help maintain relationships for businesses, but the admin work that can result from them quickly outweighs the benefits. Chasing payments, processing applications and managing credit limits all take up valuable time, which only increases as the business grows.
  Credit checks, approvals and collections are all handled by the provider with BNPL, meaning the merchant can get hours back into business, which boost the satisfaction of staff and more efficient operation.

Is BNPL what your business needs?

If your industry involves purchases that are expensive enough to cause hesitation, or large items that are needed quickly, BNPL is a payment method you should consider adopting.

With Klipboard Money, trade businesses can enable BNPL via Klarna and Affirm1 for B2C transactions and Billie for B2B.

If you’re already a Klipboard customer, we can set up BNPL in minutes within your business management software, free of charge. Simply contact the Klipboard Money team here.

Get in touch with a member of the team to learn how to introduce BNPL to your customers and drive adoption from day one.

Every workshop manager has experienced it

One small delay begins to affect the day's schedule, then another, until what looked like a productive day starts slipping out of control.

The diary is full, the ramps are occupied and technicians are moving from one job to the next. On the surface, it can feel as though everyone is working flat out. Yet despite the activity, vehicles still overrun, customers begin asking for updates and the number of completed jobs at the end of the day somehow falls short of expectations.

It's tempting to assume the problem is technician productivity. Perhaps jobs are taking longer than expected, or there simply aren't enough hours in the day.

In reality, that's rarely where most workshop time is lost.

More often, it disappears in the small moments between productive work.

• A technician walks away from a vehicle to check whether parts have arrived.
• A service advisor spends ten minutes trying to contact a customer before additional work can begin.
• A vehicle remains on a ramp while someone looks for paperwork or waits for an inspection to be approved.

Individually, these interruptions don't seem significant, but collectively, they create operational friction that quietly reduces workshop capacity throughout the day.

The cost of waiting

Most workshops are under pressure to do more with the same resources. Labour costs continue to rise, vehicle technology is becoming more complex and customers expect faster turnaround alongside regular communication.

When conditions become more challenging, the cost of those small delays becomes much harder to absorb.

Consider a routine service where an inspection identifies worn brake discs. The technician has completed the diagnosis quickly, but the job cannot continue until the customer hasapproved the additional work. If that approval takes thirty minutes, the technician moves on to something else, the ramp remains occupied and the original job loses momentum.

The same thing happens when parts aren't available exactly when they're needed. A repair that should have taken two hours stretches into half a day because the vehicle has to be moved aside while another job takes priority. By the time the original repair resumes, more time has already been lost reconnecting with the work.

None of these delays is unusual. In fact, they're part of everyday workshop life.

The challenge is that they happen repeatedly.

Operational friction is difficult to see

One of the biggest problems is that many workshops don't actually know where time is being lost.

Managers can usually see when a vehicle is overdue, but understanding why isn't always straightforward.

• Was the technician waiting for parts?
• Did customer approval take too long?
• Was additional work identified but never communicated?
• Did manual administration keep somebody away from the workshop floor?

Without visibility across the entire workflow, it's easy to assume delays are simply part of the business. Over time, however, these small inefficiencies become accepted rather than challenged.

The result isn't just slower job completion. Labour recovery falls, workshop capacity reduces and customer satisfaction begins to suffer as promised collection times become increasingly difficult to meet.

Better visibility changes the conversation

The workshops that consistently perform well aren't necessarily those employing more technicians or extending opening hours. More often, they have a clearer picture of what's happening throughout the working day.

They know where every vehicle is in its journey, which jobs are awaiting approval, whether parts have arrived and where technicians may need support before delays begin to build.

Instead of reacting after problems occur, they can intervene while work is still progressing.

Digital Vehicle Health Checks are a good example. Rather than relying on handwritten notes or verbal conversations, technicians can capture photographs and inspection results directly against the job. Customers receive clear evidence of the work required, making it easier to approve repairs quickly and helping workshops reduce the time vehicles spend waiting.

The same principle applies across workshop operations. When job management, technician activity, customer communication and invoicing are connected, information flows automatically between teams instead of relying on manual updates and phone calls.

Staying in control when conditions change

This is exactly why operational visibility has become such an important part of weathering the storm.

Workshops cannot control rising parts prices, changing customer expectations or increasing labour costs. They can, however, control how efficiently work moves through the business.

Removing unnecessary delays requires businesses to identify where operational friction exists and remove it. This may mean reducing manual administration, improving customer communication, connecting workshop processes or giving managers better visibility of performance as work happens rather than after it's finished.

Individually, each improvement may only save a few minutes, but across hundreds of jobs every month, those minutes become additional workshop capacity, faster invoicing, improved customer satisfaction and stronger profitability.

The workshops best placed to weather the storm

The most successful workshops are the ones that understand where time is being lost and have the visibility to do something about it.

By connecting workshop operations, improving the flow of information and reducing unnecessary friction, businesses can complete more work without compromising quality or customer service.

Because weathering the storm isn't about asking your team to work harder, it's about staying in control of every job.

How Efficient Is Your Workshop?

Small operational delays often go unnoticed until they begin affecting productivity and profitability.

Download our Workshop Efficiency Health Check to identify where hidden operational delays may be affecting productivity, customer service and profitability.

Download the Workshop Efficiency Health Check