5 key ways embedded finance revolutionises supplier payments
Paying suppliers is an essential part of keeping any business running. But the tools back-office teams have to manage those payments are often plagued by needless repetition and frustrating limitations. And, with so much of the process requiring manual input and communication between multiple applications, it’s also prone to long delays and human error.
But that doesn’t have to be the case. Innovative platforms like finway have embraced embedded finance to transform how B2B payments are made. finway is a powerful tool for SMEs that enables back office teams to manage accounting, keep track of budgets and process invoices with automated workflows. With Weavr’s Supplier Finance Plug-in, they can then go one step further to link up their bank account and issue payments from one holistic system.
There’s a huge opportunity for more SaaS back-office platforms to plug financial tools into their offering. Manual processes can be automated, making the back-office teams who use these platforms more efficient, less likely to make costly payment mistakes and happier that the machine is doing more of the drudge work.
Unite invoice processing and payment under one system
One of the biggest frustrations with back office SaaS solutions is that they often feel incomplete. They’re designed to make processing invoices and paying suppliers easier. The platform they use might pull in their bank account details so that they can see their cash position and movements in and out. But when it comes time to make those payments it means opening up another window, logging into a bank and filling in all the correct account numbers and amounts manually.
Embedded finance can sew that entire journey up in one place. When invoices come in, platforms like Xero can match up the reference numbers and reconcile everything, but embedded finance can then offer the ability to pay with a single button. The payment process becomes simple, and no time is wasted by moving between multiple portals.
Shrink the margin for human error
When large sums of money are moving from one business to another, accuracy is critical. One number is all it takes for the wrong amount to be paid out, or the right sum to reach the wrong account.
It might sound like a rare slip-up, but it happens all the time. Research by Versapay revealed that more than 80% of C-suite executives at large companies say they have lost revenue as a result of miscommunication causing invoice disputes. And according to 92% of those executives, the answer to solving those human performance issues was digitising the process.
The more manual steps there are, the greater the chance of those costly human errors occurring. But when payment and SaaS are integrated in one platform, those steps can be automated. There’s no need for a back-office team member to copy across account numbers and invoice amounts every time a supplier needs to be paid, and the risk of a small mistake sending money astray is vastly reduced.
Unlock the full potential of back-office teams
Whenever back-office teams have to swap between multiple tools to complete one supplier payment, it costs them and their company time. Each login might not seem like much individually, but it soon adds up to a lot of time spent doing what could be achieved by automation instead. Although a person can transfer money to a friend in an instant, a B2B payment takes an average of 10 minutes per payment.
Embedded finance doesn’t just free up teams for more tasks – it can help change their role altogether. With less time being taken up by manual payment steps, back-office teams can focus on more strategic jobs that add value to the company as a whole, and employers can get the most out of the talent they’ve assembled.
Simplify complex payment chains
Paying suppliers isn’t always as simple as transferring money from one company to another. Often there’s a much longer chain involved with each business sending or receiving invoices from each other. It’s a prime opportunity for capital to get stuck, as each business is waiting for multiple invoices to clear further up the chain before their own can be paid.
This is far from a small or sporadic issue. In 2021, the UK government said that £23.4bn in late invoices was owed to businesses across the country. While lengthy supply chains don’t account for all of that missing revenue, they are still a huge contributor to firms not getting paid on time.
Capital stuck in an account is not capital at work. Payees are forced to delay putting those funds into projects that will move their business forward. It results in slow business that leads to slow innovation and a serious economic opportunity cost.
Troc Circle is using embedded finance to tackle that problem. Using Weavr, Troc Circle identifies these payment chains and nets out all the invoices, resulting in fewer individual payments and a faster flow of money along complicated supply chains. Troc builds the tech that finds where the money’s jammed, and Weavr enables Troc to get the funds flowing where they should be going.
Make supplier payments more accessible for SMEs
In a growing business the list of tasks that need doing far outweighs the number of people on hand to do them. Paying suppliers often gets added to one person’s plate – and if they have even less time than a usual back office team to spend on making manual payouts, the risk of making mistakes is even higher.
A powerful SaaS tool equipped with embedded finance can make a huge difference for SMEs. Reliable, accurate supplier payments can be made even if there’s no dedicated back office team in place yet, and it’s easier to keep track of which payments are going out where. And as the business and revenue scales, the back office team won’t have to grow by the same amount because they’ll have the tools to keep up.
Find out more about how back office SaaS solutions can integrate payment powers and greater automation with our Supplier Financial Plug-in.