In order to identify the key QTC design elements of successful enterprise B2B companies, the Subscribed Institute collaborated with McKinsey & Company to analyze three years of performance data from nearly 500 companies and compared indicators such as revenue growth, expansion, and net retention against 30 metrics corresponding to design choices in the quote-to-cash process.

We found that when designing a QTC process, successful companies walk a fine line between simpler, repeatable processes and flexibility to accommodate unique customer needs. One of the areas that showed up as a key lever of growth was payment terms; when payment is expected from the customer and any other payment-related elements for the subscription, such as discounts for early payment.

Here’s why getting payment terms dialed in your subscription business is so important: Because of the recurring nature of subscriptions, if you have payment delays or glitchy transactions, the problems compound and start to pile up. This leads to decreased acquisition rates, slow down collections, and increased customer churn.

Our study found that companies that do a better job at getting paid faster and offering customers more flexibility in payment terms have better growth. While this seems logical, many companies don’t think about payment terms as a way to gain a competitive advantage. But what we learned is that companies were able to win more revenue when they responded to customer’s needs and offered flexible payment terms.

A company’s ability to offer flexibility in payments signals to a prospective customer that you’ve got their best interests at heart, which, in the relationship-focused Subscription Economy, is crucial.

Get more insights from the study and learn how to manage your payment terms for growth by downloading the entire benchmark below.