Updated: Mar 24, 2022
Existing invoicing and payment processes are resource-heavy and lack scalability. Here’s how to future-proof your procurement operations.
In an era of increasingly complex global supply chains, it has never been harder to scale and manage long-tail procurement. Conventional payment methods, such as bank transfers and cheque payments, are time-consuming, and onboarding new suppliers often takes far longer than it should.
For example, consider the number of steps it generally takes to onboard a long-tail supplier. To name just a few, businesses have to conduct due diligence and know your customer (KYC) checks, collect and record invoicing information, and then process payments via bank transfer or cheque.
Digitisation is already playing a major role in almost every modern business, but procurement systems in many enterprises still rely heavily on outmoded supplier onboarding and invoicing processes. Overreliance on these processes hampers a company’s ability to scale and adapt to ongoing change. This lack of agility, in turn, compromises business resilience, especially in a time when the fragility of global supply chains has never been clearer.
In the B2B world, these challenges are especially pronounced. By contrast, B2C customers have long been used to making online payments with debit and credit cards. B2B purchases are generally handled by bank transfers or cheque payments
How can businesses simplify long-tail procurement?
It is high time for the B2B world to catch up with B2C commerce, where credit card payments have long been the established norm. This is because credit card payments provide complete traceability and all compliance checks. For a truly future-proof solution, B2B enterprises should look towards virtual cards and web purchases, since they are vastly more efficient than relying on invoices, bank transfers, and cheques.
Virtual cards and automated compliance checks and invoice management are essential for future-proofing procurement in a world where 80% of B2B transactions will be digital by 2025. The coronavirus pandemic made clear the urgent need for many B2B enterprises to catch up, in order to make themselves more resilient and remain relevant in the years to come.
Virtual cards provide a dependable way to scale, adapt, and maintain complete control over procurement and payment processes. For example, a single virtual payment card might be created for a specific vendor or amount, connected to a physical card that all your procurement team members have access to, or virtual cards with dedicated budgets for each business department. By implementing a unified system for automating the functionality around virtual payment cards, such as KYC and ALM checks and invoicing and payment, you can liberate your accounts payable and procurement teams from lengthy manual processes. This will make long-tail supply chain management much easier, while also reducing risk thanks to full auditability, traceability, and mitigation of human error.
Achieving greater adaptability is the key to future-proofing any B2B enterprise. To make that happen, mission-critical processes like supply chain management and invoicing must become repeatable, auditable, and automated. The end result should be a supply chain management process in which changing, onboarding, and managing long-tail suppliers is largely automated. This, in turn, frees up time for procurement teams to focus on the relationships with strategic suppliers.