As a financial leader in your organization, you have a lot of worries. You want to improve the accounts payable department, increase cash flow, get the best ROI, pay your creditors and suppliers on time, and even be able to free up working capital in order to take advantage of new opportunities and expand your business.
To get all this accomplished, you have moved to electronic payments. But even though your payments now move electronically, there is so much manual effort that needs to be put into the front end before getting the payments ready to go and even on the back end, to resolve any questions and errors.
Moving to electronic payments involves using card, Automated Clearing House (ACH) and check and this has reduced your cost and inefficiencies but only by a sliver. It has instead introduced new problems for the Accounts Payable department. They now have to juggle 3 separate processes while equipped with limited visibility, traceability, and reconciliation information. The manual effort still exists.
This is where the hero, Financial technology aka FinTech, arrives to solve your problems
Using nothing more than the standard reports out of your company’s accounting system, FinTechs are able to make card, ACH, check and even cross-border payments within a single process. With no effort from the Accounts Payable Department, payment is guaranteed to arrive. FinTechs give the AP department much greater efficiency, visibility and control.
Companies that provide financial services through the use of technology are called FinTech companies.
A FinTech company is a financial technology solution provider that reduces or eliminates the use of intermediaries and provides direct products and services to end-users through online and mobile channels.
For applications to connect with each other, share data, and take certain actions on one another’s behalf, Application Programming Interfaces (API) are what make it possible. By using the cloud, APIs can connect to virtually any system already in place in the enterprise.
Through a combination of cloud technology, modern APIs (Application Programming Interfaces) and human customer service, FinTech companies are able to bring all payments, including cross-border payments and the supplier data, together in one streamlined, electronic process, served up in single interface.
Your Accounts Payable department can now view the entire journey of payments as they make their way to settlement. FinTech has a lot more functions:
- The information required to pay suppliers is collected, housed and maintained by FinTech companies so that the AP doesn’t need to.
- Payment information updating is done on a constant basis to ensure no mistakes are made and that payment is made through the most efficient and cost-effective means.
- On the off chance that something does go wrong during the payment process, the FinTech solution provider’s customer support team handles the follow-up.
- Payment delivery is guaranteed.
In order for you to manage your resources and cash, you need to understand what your obligations are; whom to pay and by when, visibility of all cash inflow, invoices that are being sent out. But in a system that doesn’t include FinTech solutions, invoices and payments are not linked in any meaningful way. To know if an invoice has been paid, the bank account needs to be checked, making it difficult to monitor the nitty-gritty of the process. Efficiency is created in procurement and payment once FinTech is involved, as everything gets connected and integrated into the organization’s core software.
As a B2B FinTech buyer, you would seek different product information based on the size of your organization and the stage of the buying cycle you are at.
- Longlisting Stage – The FinTech buyer at this stage wants to know if the vendor is knowledgeable about the latest industry trends
- Shortlisting Stage – The vendors who understand the priorities and challenges of the FinTech customer get shortlisted.
- Purchase Stage – Potential buyers look for testimonials and examples where the shortlisted vendor has successfully delivered to similar customers
You need to know how a particular FinTech solution impacts other departments in your organization. Look for strategic partners when in the market for FinTech companies and not just one-time vendors.
FinTech improves the relationship between buyer and supplier as the whole payment process can be more easily tracked, enabling transparency. Suppliers even get to input their own information into the system leading to less confusing and chances of error. Due to this level of transparency, you – the buyer – can even extend the time between payments. This helps you free up capital by using low-cost financing provided by the FinTech company.
By shifting a huge part of the supply chain financial administration out of your company’s AP department, it decreases or eliminates the need for suppliers to inundate you with requests asking about updates on the payment stage. Current payment information can be accessed by both the supplier and the buyer through the FinTech platform.
One major advantage of using FinTech solutions is that many of its solutions are cloud-based. There’s no software purchase or upgrade hassles. All updates take place on the cloud platform, which can be accessed through apps or websites.
Due to an increase in the number of fraud attempts, an indefinite banking regulatory environment, and the complexity of today’s payment activity; your B2B organization will be pushed to adopt faster and better payment practices.
B2B Payments are going through a long-awaited transformation leaving behind days of inconsistencies and inefficiencies. You as a B2B buyer have growing expectations for faster, more secure and more efficient payments which are easily met by B2B Financial Technology solution providers.