Today's digital payments tech is delivering far more than process and cost efficiency in the B2B supply chain, says Patrick Bermingham, CEO, Adflex--it's also creating new value by changing how buyers and suppliers find and do business with each other.
A surprising number of big organisations still rely on traditional paper invoicing and BACS to pay their suppliers. While this approach has some advantages, the stretching of standard payment terms--particularly in embattled sectors like construction--is causing suppliers considerable pain. At first glance, this looks like the odds are stacked against the supplier. In truth, however, the traditional model doesn't really benefit the buyer either. The high volume of human and capital resources required to set up and maintain admin-heavy supply chain finance processes means buyers often struggle to onboard new suppliers. This 'process overhead' can be so cumbersome that many buyers become resistant to change, opting instead to limit their supplier choices to a small number of partners, meaning they end up doing business with only a tiny fraction of the overall market.
Thankfully, digital payments integration and the popularisation of B2B card payments in the supply chain is enabling dramatic change. Here, buyers, acquirers and suppliers can all plug into independent stakeholder-agnostic payments platforms that offer simplicity and efficiency as fundamentals, by doing the invoicing, payment and reconciliation 'heavy lifting' on their behalf.
Card payments enable large parts of the payments process to be automated and streamlined, reducing administrative headaches for procurement teams and suppliers alike. For example, Level 3 purchasing cards utilise bespoke electronic card management information systems. These systems receive invoices electronically, cost-allocate and then reconcile them, all without human input. This creates significant process efficiencies by freeing up internal resources at either end.
Best of breed B2B payment processing platforms also provide detailed email remittances and portals accessible to buyers and suppliers 24/7. These portals include information about past and incoming payments and calculators that allow stakeholders to input their data to show the cost of payments and savings offered--removing any uncertainty and complexity from the equation.
Stakeholder agnostic payments platforms circumvent the conventional 'process overhead' for buyers by...