You landed a large order for wood plastic composite (WPC) cladding. Your supply chain is ready (you’re importing it from China) and, if everything goes smoothly, you’ll earn a net profit of $500,000 on this contract.
You eagerly dispatch payment to your vendor for your WPC supply. Unfortunately, your business money transfer gets delayed and, as per the terms of your agreement, your supplier sells its inventory to someone else. This leaves you without WPC cladding to fulfill your large order and with a significant penalty for your inability to hold up your end of the deal.
Indeed, efficient corporate remittance is crucial in business, particularly for enterprises that rely on globally distributed supply chains. How fast and how reliably your remittance money moves directly affects the speed, reliability, and availability of your resources.
The Hidden Costs of Inefficient Payments
Inefficient corporate payment solutions have adverse effects on business.
- Financial drain: Your corporate payment solution may be costing you more than you realize. The fees may seem like mere pennies to you, but small fees can (and do) add up.
- Operational delays: Corporate remittances do not have to happen in real time. Instant transfers are obviously ideal, but their relatively higher cost can make them impractical. That said, when payments are not remitted in a reasonable and expected timeframe, there will be problems. The example above perfectly illustrates how delayed transfers can disrupt supply chains, damage supplier relationships, and cost you hundreds of thousands of dollars in unrealized profits.
- Administrative headaches: Using traditional remittance channels for corporate payments can lead to reporting problems. You must have an excellent record-keeping system to ensure you’re tracking all remittances.
The Modern Solution: Dedicated Corporate Remittance Solutions
Work with a corporate payment solutions provider to ensure seamless remittance service that has been optimized for enterprise use cases.
Use the following criteria to assess potential providers:
- Competitive exchange rates: When you pay foreign partners, your transactions involve exchanging your currency for your supplier’s currency (i.e., currency exchange), and corporate remittance companies generate revenues through currency exchanges. Specifically, they earn from the difference, or the spread, between a currency’s buying and selling prices. Typically, the selling price is lower than the buying price, so you pay more money (in your currency) to buy a single unit of another currency (e.g., a dollar) than you gain if you sell it. Competitive exchange rates translate to tight spreads (smaller differences in buying and selling prices). These are preferable because they minimize your currency exchange costs.
- Speed and reliability: The importance of fast and secure transfers can never be overstated. Opt for providers that have a global network of correspondent banks and agents to ensure your transfers will be completed and fulfilled reliably and in a timely manner.
- Global reach: An extensive global network of partner banks and agents also means virtually unlimited global access, so you can send money to all your suppliers wherever they may happen to be located.
- Convenience and control: Choose a provider that will give you an online platform from which you can manage and orchestrate all of your business remittances from a single portal. This will give you excellent visibility and control over your transactions. It should also help simplify related administrative tasks. From your control dashboard, you can see the statuses of your remittances and drill down to specific details.
- Advanced security: You do not want your money lost in transmission. Nor do you want anyone diverting your funds or making unauthorized transfers from company accounts. Therefore, your vetting process must include an audit of a potential remittance partner’s security measures. Look for features like multi-level authorization and secure online portals.
- Flexible payment options: How do you pay for remittances? Bank transfers are the usual way businesses fund corporate payments. While this may be the norm, it shouldn’t be your sole option. For flexibility, you want a corporate remittance provider that offers you multiple payment methods, including credit cards, digital wallets, and more.
- Flexible payout options: Likewise, for your payment recipients’ convenience, your remittance provider must offer flexible payout options. It would be great if your corporate payment solutions provider offers direct bank deposits as well as cash pick-up.
- Dedicated customer support: You should definitely make customer support one of your criteria for selecting a corporate payments partner. What you need is a company that provides year-round customer support even on national holidays. You need the assurance of someone being available all the time, so that if something happens or you must process an urgent transaction, you know you can count on someone to be on hand to help you.
- Comprehensive reporting: Choose a provider that gives you detailed transaction information and readily generates reports for leadership and decision-making meetings. This means easy reconciliation and accounting.
Choose Wisely
If a global supply chain is critical to your business operations, your choice of a corporate remittance partner is crucial. They must provide a dedicated portal, an easy-to-use control dashboard, and various reporting tools. Your corporate payments provider must also offer flexible payments and payouts and have competitive currency exchange rates, a globally connected network, and excellent security and customer support.