FreshBooks users can now let customers pay invoices in installments

Klarna, a pay-later company, has partnered with FreshBooks, a software maker for small business invoicing. The goal is to let a customer split an invoice into smaller payments. The companies announced the deal in a news release on Wednesday, Oct. 21.

What changed

Klarna's buy now, pay later options will show up inside FreshBooks' invoicing and payment tools. Customers can pay in full, pay in four interest-free installments, or finance the cost over time. The release says merchants need no added setup.

It gave two examples. A plumber billing for a routine job can take payment in full. A mechanic billing for a medium-sized repair can let the customer spread the cost over four payments.

Why it matters

Small businesses often wait on customers to pay. Jeff Imm, a FreshBooks general manager, said offering pay-later has been shown to speed up cash flow and revenue. He also said it removes the risk of not getting paid. Klarna's Lisa Robinson said business owners keep predictable cash flow while customers get flexibility.

What is not known yet

The material does not say what fees merchants pay, when the feature reaches every FreshBooks user, or how customers qualify. It also does not say what the financed option costs a customer. Business owners should check those details before offering it.