How Financial Institutions Can Simplify Vendor Management
Improve your internal processes and provide greater value at every touchpoint in the service-profit chain with optimized vendor payment management.
Third-party vendors provide critical services on a daily basis that allow FIs to focus on the core competencies and service offerings that are of most value to customers, and the health of the bank’s bottom line.
Simplifying your bank vendor management workflow and streamlining your vendor payments is a win-win for the bank and your vendors, and provides immediate benefits to all parties involved.
Modern financial institutions have come to discover the importance of including vendors in the service-profit chain, in which “Profit and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers.”
When you provide value to your vendors with timely payments, diverse payment options, and enhanced security for their sensitive data, you will foster long-term relationships that will encourage your vendors to offer similar value, and to be of service to your organization as you grow and expand your own offerings.
Benefits of Optimized Vendor Management
If banks only had a handful of vendors to manage, life would be far simpler. But the reality is that AP professionals, even at the smallest financial institutions, often deal with dozens of different vendors each month, all of which have different payment preferences, compliance standards, and contractual obligations. For larger FIs, this number can easily range into the hundreds.
The starting point for simplifying your vendor payments program is to centralize this information within a platform that allows real-time monitoring and enhanced security and features, providing measurable incentives for both financial institutions and vendors.
Expedite Approvals & Pay Vendors Promptly
It’s easy to imagine how difficult it can be for hardworking, often over-extended AP departments to get invoices approved and paid in a timely manner, especially considering that it takes an industry average of approximately one week to manually process a single invoice.
Automating AP in a secure, web-facing platform makes it simple to receive, approve and pay invoices with just a couple of clicks, with customizable workflows, rules and restrictions that help banks eliminate redundancies in the AP payments process.
Just as FIs appreciate the greater predictability and control that automating AP offers, your vendors will also appreciate consistently on-time payments. From a vendor standpoint, on-time payments not only keep you in good standing as a customer, but also enable better forecasting and budgeting on their end.
With the right bank vendor management software in place, vendors receive immediate, guaranteed funds, as opposed to waiting a minimum of 5-7 business days with paper check payments.
Vendors will appreciate the seamless payment processing, as delayed or late payments often result in bounced checks, disputed costs, and other unpleasant issues that could otherwise easily be resolved with the right automated payments solution.
Give Vendors More Payment Options
One great way to simplify your bank vendor management is to offer your vendors a wider range of payment options.
Going back to the concept of the service-profit chain, providing meaningful value and flexible options to your vendors will encourage them to provide greater service and solutions to you. Whether your vendor provides a simple utility service, or a more vital function such as help with payments processing or approvals workflow, you want to keep good relationships.
These vendors will be more likely to have you top-of-mind when they innovate new product or service offerings that may enable you to pass along greater value to your customer base. This, of course, will result in greater customer satisfaction, better reviews, and increased customer loyalty and retention.
Many vendors also offer e-payment or other early payment incentives that can significantly contribute to a healthier bottom line when compounded over time. While benefiting your FI, staying on these vendors’ “on-time” lists also provides them with greater control of how to invoice and get paid, and allows for a more forecastable ROI.
Guarantee the Security of Sensitive Vendor Data
Increased security is a top consideration for vendors, especially large ones that maintain thousands of customers, all of which have some degree of access to their sensitive financial data. Consider that some 73% of organizations report having experienced fraud.
Sending invoices and payments through the mail exposes both FIs and vendors to unnecessary risk, especially in an era when sophisticated fraud artists have elevated their schemes to include breaches into sensitive digital databases. Manual payments processing is just too easy a target for scammers in 2020, while automating your AP can minimize the threat of fraud.
Fraudsters often go after third-party vendors, rather than FIs directly, so being able to guarantee the safety and security of sensitive data will provide immediate value and give your vendors much needed peace of mind.
Build Strong Vendor Relationships
Relationships — whether with your customers, employees or vendors — provide the foundation upon which a sustainable and profitable business is built. Relationship management is at the core of an optimized service-profit chain, in which all involved parties derive value and mutual benefit. Third-party service providers should not be excluded from this relationship-building paradigm.
When you commit to providing value to your vendors by paying on-time, offering payment options, and thinking security first, you’ll build a foundation of trust that is future focused and based on long-term, strategic objectives.
Contact us today to learn more about how BankTEL is helping FIs large and small effortlessly schedule transactions, pay bills, and take greater control of their bank vendor management with a completely automated and easy-to-integrate AP vendor platform.
What Our Clients Are Saying
“We just had our first external audit with ASCEND. I scheduled a 30-minute sit-down with the auditor to look at specific items. This process would have taken about six hours before ASCEND. The auditor couldn’t get over how easy and accurate it was. She said at least 10 of her bank clients immediately came to mind, that should start using BankTEL. She took a stack of my cards, to give to the accountants at these banks, in case they wanted to call with questions.”Nicole HulbertSeaside National Bank & Trust
“I’ve been through the conversion process to new software before, and it’s usually a nightmare. Nothing balances and nothing works. But with ASCEND, things balanced and things worked. It was a very easy move.”Mendy CollierRegent Bank
“With BankTEL, everything was more streamlined, there was better reconcilement, better functionality and better security on the user-side of things. It was a major step up for us.”Heath PrescottFarmers & Merchants Bank of South Carolina
“Banks deal with accounting every part of every day. It’s a core part of the business. To be able to maneuver through the system and have the detail of records, the tracking and reporting that are available at BankTEL, was long overdue. Ascend is leagues ahead of where we were previously.”Tony AtecaSecurity Federal Bank
“One thing I like about BankTEL is that they always want to know what you want and how they can make their product better. They like to listen to customers.”Lynn McKeeBankWest