14 Hidden Charges You Should Avoid Using Vendor Payment Software
How difficult can life be for a businessman?
Running a business. Floating it through the covid crisis. Make Vendor payments promptly.
The struggle is real.
What adds to this struggle is, when you have multiple accounts payable, and you are forced to use a traditional big bank to complete the process.
At the end of the month when you look at your balance sheet, you realize something isn’t right. You would recognize some transactions that you never made! Neither was any SMS/email alert sent to you regarding the debit of these amounts.
On further checking the details, the transactions contain some terms which you do not fully understand. Many Startups & SME business owners find themselves in a very similar situation all the time.
For a business owner, it becomes a rather painstaking process to understand all the hidden charges since there are just so many accounts payables to handle.
Many times, businesses are charged without even being informed. This creates a cash flow deficit in the long run and ultimately hampers business growth.
Another issue is with almost 90% CFOs choosing different digital options for vendor payment processes, it almost seems like a nightmare to choose the right software for your own business.
In this blog post, we discuss how to choose the best vendor payment software, while avoiding hidden bank charges at the same time.
- What is Vendor Payment Software?
- Hidden Charges in Banks Without Vendor Payment Software
- 1. Not Maintaining a Minimum Balance
- 2. Bank Visit Transactions
- 3. Online Funds Transfer
- 4. Annual Card Fee
- 5. ATM Usage
- 6. Email/SMS Alerts
- 7. Bounced Cheque
- 8. Cheque Cancellation
- 9. Requesting an Extra Cheque Book
- 10. Recurring Payments
- 11. Balance Certificate
- 12. Closing of the Bank Account
- 13. Branch Transfer of Bank Account
- 14. ATM Card/Kit Returned by Courier Because of Wrong Address
- How to choose the right Vendor Payment Software?
- Benefits of Vendor Payment Software
- What Does Karbon Charge Its Customers for Vendor Payments?
What is Vendor Payment Software?
To speed up the everyday AP process, vendor payment software is used, that automates every payment process.
It includes invoice scanning, automated approvals, timely payments and even global cross-border payments. It additionally ensures tax compliance and fraud prevention with safe cyber security.
It keeps a strict tab on the debts and liabilities of the company.
Hidden Charges in Banks Without Vendor Payment Software
1. Not Maintaining a Minimum Balance
Banks charge you a certain “penalty” if your account balance goes below the minimum requirement agreed upon while opening the bank account. For each default, you may be charged anywhere between Rs 200 to Rs 500 per default case.
2. Bank Visit Transactions
Banks inherently want to discourage users from transacting in their physical branches which makes it more expensive for the bank rather than an ATM or online transaction. Some banks charge Rs 50 to Rs 200 for this service!
3. Online Funds Transfer
Because banks need revenue to operate and maintain their physical branches, they charge a certain amount of fee even off online money transfer methods like RTGS or NEFT. This amount is typically between Rs 5 to Rs 25 per transaction.
4. Annual Card Fee
Based on the card, banks charge a certain amount of fee that varies from Rs 100 to Rs 500 based on the slab. Additional charges are levied for any additional cards under the same account.
5. ATM Usage
RBI has now allowed banks to charge their customers anywhere between Rs 8 to Rs 20 per withdrawal in its new notification. This amount is different based on the type of card.
6. Email/SMS Alerts
What started as an effective security feature has also opened up a revenue stream for the banks. Banks may charge you Rs 15 per quarter for these automated alerts.
7. Bounced Cheque
If a cheque bounces, the penalty is levied on both – the person who issued the cheque and the person who submitted it. This amount ranges from Rs 100 to Rs 500 per failure.
8. Cheque Cancellation
Rs 50 to Rs 100 levied by any private bank to stop payment requests.
9. Requesting an Extra Cheque Book
Rs 30 per book after a fixed number of books
10. Recurring Payments
One-time fee + recurring fee charged. Failed attempt costs you up to Rs 225.
11. Balance Certificate
Rs 100 to Rs 500.
12. Closing of the Bank Account
Up to Rs 500 for early closing.
13. Branch Transfer of Bank Account
Rs. 100 -200 per instance in most Indian Banks.
14. ATM Card/Kit Returned by Courier Because of Wrong Address
Up to Rs 100
How to choose the right Vendor Payment Software?
- Have a thorough understanding of your invoice process and then envision an AP framework.
- Check present Status
- How does your firm receive invoices, digitally or offline post?
- Is the online invoicing in PDF or excel format
- Define invoice workflow for clarity.
- Mitigate all the errors while matching PO invoices to line levels.
- Segregate purchase orders, based on their relation to expense invoices.
- Sketch a plan for the AP invoice process.
- Choose automated taxing software.
- Choose a software that can blend easily with your existing accounting setup.
- Form a team that understands organisational needs thoroughly.
- Choose the most relevant vendor payment software.
- Focus on workflow rules and execute them smoothly using the best vendor payment software suitable for your needs.
Benefits of Vendor Payment Software
With the exponential “fintech” revolution in India, there has been a shift towards vendor payment software.
The biggest advantage of such a digital entity as your banking partner is the NO HIDDEN FEE model. Since these entities do not have any physical liabilities, it becomes very easy for them to digitally deliver a great banking experience.
Amongst them, a simple single dashboard design and fast transactions should be your number 1 priority. Keeping this as the base you can select the vendor payment software most suitable for your business.
That said, allow us to introduce our very own AP automated vendor payment portal- Karbon Payout.
What Does Karbon Charge Its Customers for Vendor Payments?
Karbon payout is free to use with no hidden fees. All Karbon customers can use the Payout tool without having to pay any fee for using the service.
- All payments are consolidated within one user-friendly dashboard to help you keep your financial operations in order.
- The smart platform replaces any kinds of spreadsheets that you use to track vendor payment status.
- All the due dates are stored in one place so you can prioritize your vendor payments.
- 24×7 instant payments – banks might sleep, but we never do!
- Payout links – manual vendor beneficiary addition? Forget it! Send payout links to your vendor and let them add their beneficiary details there.
Payout will help businesses save time and money, especially startups that have small-value recurring bulk payments. Thousands of companies have already moved to Karbon Payout and they are loving it.
Don’t be left behind. Move to Karbon Payout today and avoid all hidden bank charges!