4 Signs Your B2B Payment Processing Is Hurting Your Company’s Efficiency

B2B payments have been comparatively slow to adopt new technology, largely due to concerns for data security and compliance. However, these systems determine the pace at which value chains function. This means that even the best supply chain systems are often hamstrung by outdated financial platforms.

Fortunately, the time has never been better for distributors to overhaul alcohol payments. With mass digitization of pre-internet era processes, distributors are seeing massive overhauls in incumbent payment processing. Moreover, as competitors bring new technology into the fold, those that rely on predominantly manual systems are starting to feel the heat.

Distributors need to re-examine incumbent systems that may cause them to stumble in fast-paced supply chains. With this said, here are a few telltale signs your payment system could be undermining your ability to operate efficiently.

Red Flag 1: Your Payment Processes Are Paper-Based

Late payments, disputed invoices, and collection notices are characteristic of paper-based payments. If any of these scenarios seem familiar, it’s time to take another look at your AP/AR processes. The problem with using cash, checks, and money orders is that these processes take a lot of time. Paper systems equal paperwork, which can put a strain on resources.

For example, actual deliveries and invoices don’t always match up. Breakage and price variations often creep in to make simple deliveries complex, leading to credits being issued to retailers. Come month end, recons take up days of staff’s time, since every transaction record is in hard copy. Payments are further held up when invoices are lost, or invoice data is inaccurate.

Red Flag 2: Approvals Are Taking Too Long

Distribution managers rely on the smooth execution of everyday processes to meet demanding KPIs. Ironically, their own busy schedules can cause delays when accounting staff can’t reach them for for sign-offs. Even email approvals can take days before they’re answered. Yet, the longer it takes to approve an invoice adjustment or credit approval, the longer it takes for distributors to get paid.

Most leading mobile B2B payment systems are helping finance teams communicate more effectively. Both retailers and suppliers can track live transaction data and sign off on important tasks. Decision makers on both sides are in constant contact to resolve any stock or payment issues as they arise.

Red Flag 3: Lack Of Supply Chain Visibility

Manual B2B payment processing, along with unstructured financial data, can cause blind spots to cost reductions, promotional opportunities, logistics, etc. Moreover, visibility into stock and cash flow are only possible once you’ve entered invoices into accounting systems. To make matters worse, legacy accounting systems often run in siloes. These factors hinder supply chain collaboration and can lead to massive operational overheads. This simply isn’t good enough in today’s fast-moving alcohol industry.

B2B Suppliers taking measures toward information integration are set to outperform their peers. Digitized systems allow distributors and retailers to share and analyze supply chain data, leading to better collaboration. By sharing sales, invoicing, item level, and other data, partners can better orchestrate supply demand balancing, while optimizing product sales. For example, analyzing product performance down to area, store, and seasonal parameters can help inform distributors’ warehousing and logistics, while reducing the cost of merchandise to retailers.

Red Flag 4: Ballooning Logistics And Transport Costs

Transport and logistics incur some of the biggest financial and operational costs for distributors. For large operations, inefficiencies in transport can total millions each year. Factors such as warehousing, vehicle maintenance, and fuel costs reduce working capital and undermine cash flow when not managed optimally.

Inefficient supply chains can also lead to expired stock, causing further losses for distributors. If your backend logistics are putting strain on working capital and you’re juggling to meet retailer demands, it’s likely that the cause of your problems are buried in a complex payment processing system.