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Rocket scientists get a lot of credit when it comes to intelligence. Using the phrase ‘it’s not rocket science’ to denigrate another professional pursuit because someone has packed a bunch of fuel in a tube and pointed it towards the sky before lighting the proverbial match seems a little disingenuous.
Indeed, probably a lot more thought has been put in by many intelligent people about how to send something around the world rather than out of it. Supply chains, in other words, are complex, tricky beasts, and retail supply chains are right up there in terms of complexity.
Whether you’re a food retailer importing fresh food from another continent, a pharmaceutical chain arranging to get the right medications to the right places at the right time, or a clothes retailer selecting the fashions customers will want, managing that supply chain plays a significant role in the success (or not) of your business.
How better payments technology removes friction from a retail supply chain
How money moves through your retail supply chain will always be a core part of how you manage it. So today, we’re looking at what benefits advanced payments technology will bring to your business, and the team managing your supply chain.
- Improve visibility over their supply chain (for everyone)
Having visibility and transparency over your supply chain is the first step. At present, traditional payment methods mean that once that button is clicked (or a physical check is sent), the money disappears into the ether only to appear on the other side, sometimes showing a different amount.
With advanced payment platforms, you’re able to track payments like you track an online delivery. You can also give access to this tracking to your supplier, meaning they can plan accordingly (and not have to make enquiries to your finance team).
- Increase the speed (and accuracy) of payments
Faster isn’t always better, but it generally is when it comes to payments. Because fintech's have built their own global payments network that they control, payments move from A-B much quicker than in traditional correspondent banking networks.
This allows finance teams to work more efficiently, keep suppliers happier with quick payments, and keep treasury departments happier with quicker receivables.
With automated processes built into these systems, and features such as live exchange rates giving clear indication of what the party must pay to match the amount billed, accuracy is improved too. This means easier reconciliation, and less follow-up when payments don’t add up.
- Lower transaction costs and improve cash flow
This speed and accuracy have an obvious cash flow benefit too. Not only are you receiving your payments quicker and more accurately, but you’re also able to plan better and be more flexible with your outgoings.
"It's increased our revenue by about 3%, just purely on the savings we make on bank charges and credit card charges. In terms of processing time; I would say per payment we've probably knocked 20 to 30% off the amount of time that we would normally have spent chasing up those things."
Rowland Crawte, American College Dublin
As well as improving your cash flow management, you also improve your overall liquidity holdings by saving costs. As said in the previous section, fintech’s own their global payments network, meaning they will offer transactions with little or no costs per payment (especially when it comes to international payments), and excellent FX rates.
- Automate processes to reduce administration time
We sometimes focus too much on the clear costs of payments – the banking fees and the FX rates – without considering the cost of administrating the accounts.
The savings businesses can make from reducing those fees and commissions are headline-grabbing, but the benefits of automated processes that advanced payments technology bring to the table are substantial. From easier reconciliation to simple but effective features like scheduled payments, automation ends the need for manual entry across a plethora of tasks.
Automation also helps remove human errors, and all the implications those errors have down the road.
"For me personally, the ability to import and export data, and the way it flows from SAP Concur is awesome.”
Reneé Thompson, Opportunity International
It’s also not just within singular systems where automation comes into play; the ability for fintech’s to connect systems and remove the manual tasks of connecting them (such as the downloading and uploading of data across several systems) saves both time and eliminates those errors. What’s more, it also reduces the chances of fraud for the simple reason that humans handle the data less.
In a complicated ecosystem like a retail supply chain, automation makes it easier for humans to operate efficiently.
- Improved data insights
Advanced payments technology supplies access to data analytics to help retailers better understand their supply chain and payment cycles. This information can then be used to optimize inventory levels, anticipate demand, and identify opportunities for cost savings.
By incorporating advanced payment technologies, retailers can gain a much better understanding of the performance of their supply chain. This can help them identify areas where they can save money, increase efficiency, and even identify areas where they may need to invest in additional resources.
- Improve the customer experience
A supply chain doesn’t stop at the warehouse. Creating a more seamless and secure experience for customers is the final step in the chain.
Having customer payments process quickly and accurately, allowing for quick confirmation and getting the whole supply chain cranking into gear, is something any payment process must be perfect at.
“One thing Vita Student prides itself on is the experience. And if the experience of even just making a payment to us is difficult, then we failed at the first hurdle. We can transact now with ease. It's a frictionless journey for all of our students across the world.”
Nichola Collette-Yates, VITA Student
It’s also essential, particularly when your customer base is global, to provide a wide array of payment options for the customers to use; an ability fintech’s have certainly brought to the table.
Personalization of the payments journey is another way to improve the customer experience. By collecting data on payment preferences and behavior, the business can tailor offers and services to better suit customers. More advanced payments technology can also enable loyalty programs and rewards, which can further personalize the customer experience.
It pays to pay well
Complexity is a hard thing to tackle. It’s often easier to tick a doable task off the to-do list than wade into something that can easily overwhelm the senses. Luckily, when it comes to global supply chains and how money moves within them, a lot of smart people are tackling this complexity every day and are developing integrated, automated, and easy-to-use solutions.
For retail businesses, these solutions can have huge impacts on how their supply chain operates, the efficiencies they can create within their own ecosystem, and the work that is needed to garner those efficiencies. A clear competitive advantage is ripe for the taking for those that decide to change how they pay.
It's not rocket science.
If you want to learn how TransferMate helps retailers cut costs, reduce administration time for finance teams, and remove friction from their supply chains, book a call with the team today.
