If you own a business, supplier or vendor payments must be something you are familiar with. It is one of the important forms of money movement among business operations. Every business must have some sort of a system in place to ensure you have a foolproof way to pull all your vendor payments invoices together and track when they are due. Next, you disburse their payments in a timely manner, making sure all particulars are met.
But, chances are, your system is not as foolproof as you think
In this brief article, we explore the challenges of international vendor payments. We also reveal a foolproof strategy every business can adopt to manage your supplier payments promptly in a systematic way, ensure a great relationship with your supplier, and eventually to keep your business up and running as best it can be.
Key Challenges with Cross-border Vendor Payments
A small or medium-sized business makes at least 10 to 20 vendor payments on a monthly basis. More and more companies now work with international vendors to take advantage of lower costs, specialised knowledge or capabilities, optimised production practices, industry-leading locations, and potential economies of scale. But at the same time, they find it challenging to effectively manage vendor payments:
- To different vendors
- At different times of the month
- With different payment methods
- For multiple currencies
- At lowest possible cost
- Making high value transactions online
Many companies continue to rely on international bank transfers or cheques to make payments, and then do manual reconciliations. This is not only expensive, it’s also cumbersome, time-consuming, and prone to errors.
Banks charge as much as 3-5%, sometimes even more. Naturally, the higher the transfer amount, the higher the fees. Some banks will charge a different rate depending upon the currency in which your money is sent.
Over time, more transactions to this supplier would increase this outflow, adding to costs, and causing all sorts of problems for profits and cash flows.
In addition to such high bank fees, your company will also have to contend with unfavourable exchange rates. Banks always offer weaker currency exchange rates, compared to what you see on Google. They also charge a significant markup on international foreign exchange (FX) transfers. These high transfer charges (1.5% or even more) and FX conversion fees add to your costs over time, and impact your final bottomline.
There is an easy way to resolve all these challenges to simplify vendor payments at lower costs.
How to Streamline Vendor Payments with Wallex
Wallex offers customised, low-cost, cross-border vendor payment solutions, so you can pay all your international vendors in full and on time. Banks often charge arbitrary fees and commissions – many of them hidden – leaving customers in the dark. They also “pad” the exchange rate to increase their profits. Wallex eliminates these issues with no hidden costs and a 100% transparent transfer process. Through a single platform, you can manage all your cross-border payments and transactional FX. With Wallex, you get the best possible exchange rates and very low transaction fees compared to banks. This means you save money on every payment transaction, which translates to lower costs and higher profits.
Indonesia’s fintech Investree saves 70% in fees on their cross-border payments with Wallex. Like them, Wallex can help you simplify your vendor payments, no matter where they are or which currency they (or you) use. Fast, timely payments also help you strengthen vendor relationships, which can yield many benefits to your business over the long term.
Here are some more advantages you get with Wallex that are just not possible with bank transfers:
- Low-cost payments to 180+ countries in 46 currencies
- Access the fairest FX rates and lowest fees to decrease costs and increase profit margins
- Payments are received up to 4x faster than international wire transfers
- Track payments in real time
- End-to-end encryption protects your funds in transit
- Dedicated account manager to quickly resolve queries and address any issues
Other World-class Features to Simplify Cross-border Vendor Payments
Most businesses work with multiple vendors, and make at least 25 to 30 vendor payments per month on average. So how do you manage these multiple vendors/payments/currencies? Do you:
- Use spreadsheets to maintain and track invoices
- Manually calculate and deduct tax
- Do manual reconciliations
- Have to wait when you add a new vendor as a beneficiary in your bank’s payment account
- Worry about security issues
- Worry about meeting your compliance responsibilities
These are all common challenges for companies working with international vendors. Wallex provides the solution to all these issues through its simple, low-cost, automated payments solutions.
In addition to transparent FX rates, low fees and fast transfers, Wallex also offers features specifically designed for businesses working with multiple international vendors:
- Bulk payments and approvals: Upload multiple payments in one go
- Multi-level approver matrix: For better corporate governance
- Currency hedging: To protect your organisation from the effects of currency fluctuations
Get Started with Wallex for Free
Any organisation operating internationally must streamline their vendor payments process to ensure that the business continues to run smoothly and profitably. Payments through international bank transfers are far from the best way to manage these accounts payable. Not only are they expensive and slow, they also affect your company’s profits, cash flows and competitiveness in the long term.
Switch to the low-cost, fast and transparent vendor payments solutions from Wallex and experience all the advantages of cross-border trade. Click here to get started for free.