vendor payment portal

The hidden opportunity of vendor payment portal: Top 3 reasons why SMEs & startups should consolidate them

What is vendor payment portal

A vendor payment portal is a software interface that allows finance managers to send payments. Each bank offers its own vendor payment portals. Each vendor payment portal comes with a unique vendor payment process. To most SMEs and startups, the vendor payment portal is considered merely a tool to process payments. The need to consolidate vendor payment portals is overshadowed by other priorities. In this blog post, we will discuss the payment process and why it is important for startups and SMEs to consolidate vendor payment portals.

Reason 1: Vendor payment remains a core priority for finance

The job scope of finance has expanded in recent years.  Unforeseen business challenges and financial technologies have unlocked new opportunities in cost reduction and cash flow optimization.  Nevertheless, the essence of finance remains unchanged.  The need to balance receivables and payables is always present.  For payables, maintaining a seamless payment operation is still the top priority.

As the business grows, the frequency of vendor payment and transaction volume also grow.  New startups might pay a handful of vendors every month.  A multinational enterprise could process payments daily to thousands of vendors.  In a blink of an eye, a simple “let-me-do-it” type of task will quickly evolve into a full-scale operation.  Nevertheless, the purpose remains the same: pay your vendor on time with no errors.

Reason 2. The invisible challenge – standardizing vendor payment process

There are many challenges with the vendor payment process.  One of the most important, but arguably the least obvious is to standardize the vendor payment process.  Most startups and SMEs willfully ignore this because no one has the appetite for a 3-hour discussion on the future finance process while the entire company is fighting for survival. Shortcuts and hotfixes are considered normal.

Things evolve as the business grows. Yet some decisions stay with the business. Some of those decisions have far-fetching consequences.  If you have been through it, you will know what I mean.  If you are new to the startup game, here’s an example.

Imagine you are the CFO of a startup.  Setting up bank accounts and payment processes are among your top priority list.  Chances are you will park investors’ money in different banks for good reasons.  When your fund is divided across several banks, you may choose to pay vendors from several vendor payment portals.  Each vendor payment portal has unique payment processes.

For the sake of argument, let’s assume bank A requires the finance manager to fill payment details online and execute the payment process online; bank B requires payment details to be filled in an offline spreadsheet, and bank C uses the same spreadsheet process as bank B does, but requires the user to submit the spreadsheet in a different format.

Let’s continue with the example. Imagine you decide to use different vendor payment portals of bank A, B, and C to pay different vendor bills.  Later, as your business grows, you decide to hire 3 finance managers, each managing a vendor payment portal.  As the volume goes up, automation becomes a requirement.  You decide to work with the tech team to build an automation tool to process vendor payments.  After several months, the tool is delivered but doesn’t meet your expectations.  You revisit the decision and decide to look for a mature solution from third parties.

After long waiting and failures, you just want to get this issue resolved soon.  Tradeoff becomes inevitable.  And choices are limited.  When the business operation is at risk, the cost is no longer a priority.  You have to live with the consequence of paying vendors via bank A, B, and C separately in the beginning.

Courtesy of www.vecteezy.com/

This is just one example among many of why it is a good idea to unify vendor payments portals early in the process.  When solving this challenge, SMEs and startups should choose their own path.

Reason 3. SAP, Oracle, and Concur are not the right fit for SMEs & startups for vendor payment solutions

I am sure you have seen big banner ads for SAP, Oracle, or Concur in business events and airports.  These big players dominate the payment solutions market for enterprises because of their ability to provide customized solutions and their experience of ensuring nothing breaks during the transition.

However, these brands are rarely the best bet for SMEs and startups.  

Why?  Let’s first talk about what the enterprise needs.  Most enterprises focus on preserving existing processes due to the high cost of service disruption.  Service continuity and customer experience always take the front seat.  Finance leaders of enterprises prefer to hire external professionals to solve seemingly benign problems for a variety of reasons.  Cost is part of the decision-making, but is rarely the top priority.  Decision-making at the enterprise level can last for months and sometimes years, considering the number of stakeholders and processes involved.

SMEs and startups face different challenges.  Time is more impactful in a world where growth equals survival.  Immediate cost reduction trumps long-term financial planning.  The chain of command is not existent since most decisions are made on the fly within a small circle of leaders.  On product preference, SMEs and startups don’t need a luxurious dashboard with a hundred buttons or a labyrinth of internal controls.  They need simple, intuitive products that work.  When a product scores high on all criteria, they call it smart.

Spend smart with Karbon Payout: Simple, intuitive, and functional

Karbon Payout is built for solving the vendor payment portal issue for SMEs and startups. We follow a quick process to onboard you.  You can finish the onboarding within the chai break.  The dashboard is simple and intuitive.  Reports are real-time.  Features are built in to minimize errors and free up your time by automation.  Most importantly, Karbon Payout standardizes your vendor payment process.  Under a unified experience, you will no longer need to pay via different vendor portals.

Karbon payout also offers vendor payment on credit, 24/7/365 payment even during banking holidays, and corporate finance features including bulk payment, beneficiary management, advanced maker checker, smart payment routing, and invoice tracking.  Do you recall the pain when the bank rejects your bulk payment but doesn’t tell you exactly which translation failed?  Not any more.

We would love to chat with you today. Let us know the best number to connect. Alternatively, you can reach us on WhatsApp with 1 click, schedule your 15-min demo here, or reply to this email. 

Looking forward to hearing from you!

About Karbon

Karbon is a free B2B payment suite to help CFO and business leaders to control company finance. We achieve this by automating repetitive tasks and cleaning process redundancies for our users.

2019/7 – Launched and became an instant hit among Bangalore founders
2021/8 – Graduated from Y-Combinator (YC S21′) among the top growth picks
2021/9 – Closed $12mn pre-A round
2022/2 – Closed $15mn A round

About the Author

Bo Li
Cofounder – growth and acquisition
Karbon Card
+1 (617) 959 0354

 

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