How long does your organization take to process a supplier payment upon approval? Manual payment processes are not only time-consuming and error-prone, but they also hinder your business’s growth potential. Thankfully, there’s a solution: seamless ERP & bank integration.
The Problem: Stuck in Manual Mode
Imagine your finance team spending 520 hours a year – that’s 65 full workdays – buried in manual tasks like invoice processing, payments, and reconciliation. Well, for an astounding 72% of finance teams, it’s the harsh reality, according to Business Wire. This coupled with the majority of enterprises using traditional transactional methods like cheque payments in their daily operations, screams a huge lack and inefficiency in the financial operations of most organizations.
Challenges of existing Payment Methods
Most businesses manage B2B and supplier payments via either online payments, Cheques and use of other tools and mobile platforms. All this while have an ERP in place where the payments are first processed and approved. The process then switches to the actual transfer of funds. All these steps amount to bottlenecks in the execution of activities e.g. where a payment is required upfront in order to have a critical service or item delivered.
Some current payment methods include:
Cheques: Cheques require considerable processing time, often resulting in delays of several days for funds to become available. Infact, there is a famous Kenyan saying “it’s waiting on one signatory” to justify delays. Additionally, the manual handling of cheques heightens the likelihood of errors and potential fraud.
Online Banking: While most organizations have an ERP in place , where payments are originally captured and approved, they still need to connect to their online banking portal and manually enter transactions followed by additional approvals before the fund transfer can take place.
Mobile Money B2B: Mobile payments in the region have constraints such as transaction limits and fees steep fees for larger transactions.
Why Traditional Methods Persist:
Well, there are several reasons why businesses and organizations with ERP systems are still hang up on traditional payment. Here is a breakdown:
Limited Understanding or Awareness: Some businesses might simply be unaware of the potential benefits of integrating bank functions with their ERP systems or lack a clear understanding of how such integration could improve their operations and financial management processes.
Legacy Systems: Many businesses in Kenya might be using legacy ERP systems that were not designed with modern bank integration capabilities in mind. Upgrading or replacing these systems to support bank integration could be a significant undertaking, requiring investment in new software and potentially extensive retraining of staff.
Security Risks: Introducing bank integration into an ERP system may raise security concerns. Businesses might worry about the risk of unauthorized access to sensitive financial data or potential security breaches that could compromise their financial information.
Cost Concerns: Implementing bank integration often involves additional expenses, including software licensing fees, development costs, and ongoing maintenance expenses. For some businesses, especially smaller ones, these costs might be prohibitive or difficult to justify.
Complexity: Integrating ERP systems with bank functions can be technically complex. It requires coordination between the ERP vendor, the bank’s IT department, and potentially other third-party service providers. Some organizations might be wary of the potential challenges and disruptions that could arise during the integration process.
How ERP to Bank Payment Integrations work
A user generates payment journals in Microsoft Dynamics and submits the suggested payments for approval (ERP).
The authorized user selects to Transmit Payments which sees the system connect to the Bank and deliver the transactions automatically (ERP).
The transactions are visible in the bank portal awaiting final approval (Bank).
Upon approval the transactions are disbursed to suppliers accounts in different domestic or international banks (Bank).
A remittance advice (optional) is emailed to the suppliers upon payment disbursement (ERP).
The entire process can be completed in minutes as there is no need to re-enter transactions in online banking portals or contact the bank. Vendor bank information can be maintained in the ERP for re-use.
The Solution: Unlock Efficiency with Integration
At Premier Analytics, we specialize in helping businesses like yours overcome these challenges and unlock the power of ERP & bank integration. We partner with leading ERP platforms like Microsoft Dynamics 365 Business Central and connect organizations to their bank of choice.
Our customers not only have their payments flow from the ERP to the bank but also get additional functionality with this integration like automatic download of bank statements for easy reconciliation.
What does this mean for you?
Streamlined Financial Processes: Integration enables seamless exchange of data between the ERP system and the bank, automating tasks such as payments, receipts, and reconciliation. This streamlines financial processes, reduces manual errors, and improves efficiency.
Improved Cash Flow Management: With integrated bank functions, organizations can better track cash inflows and outflows, predict future cash flows, and optimize working capital management. This helps improve liquidity and minimize the risk of cash shortages or excesses.
Enhanced Security: Integration can strengthen security measures by reducing the need for manual data entry and minimizing the risk of errors or fraud associated with manual handling of financial transactions. Secure data transmission protocols can also be implemented to safeguard sensitive financial information.
Efficient Reconciliation: Automated reconciliation between bank statements and ERP records eliminates the need for manual reconciliation processes, saving time and reducing the risk of discrepancies. This ensures accurate financial reporting and compliance with regulatory requirements.
Better Customer Service: Integration can improve customer service by enabling faster processing of payments, refunds, and other financial transactions. This enhances the overall customer experience and satisfaction, leading to increased loyalty and retention.
Scalability and Flexibility: Integrated systems can easily adapt to the changing needs and growth of the organization. As the business expands or diversifies its operations, the integrated ERP-bank system can scale accordingly to accommodate new requirements and processes.
Faster Decision-Making: Management can respond promptly and fast track decision making to opportunities and market conditions when they have timely and accurate financial information.
Better Audit Trail: Integration creates a detailed audit trail of financial transactions, providing transparency and accountability for regulatory compliance and internal audits.
Regulatory Compliance: Integration ensures compliance with regulatory requirements related to financial reporting, tax filings, and data privacy.
We understand your concerns and prioritize addressing them through:
Collaborative Approach: We work closely with you to understand your specific needs and tailor the integration solution accordingly.
Proven Track Record: We have a successful history of integrating various ERP systems with leading banks, giving you peace of mind.
Simplified Integration: We utilize bank APIs and testing platforms to streamline the process, minimizing disruptions.
In our integration projects, we’ve partnered with prominent banks such as Standard Chartered Kenya, ABSA Kenya, Citi Bank USA, Bank of America, and UBS Switzerland. Many banks provide APIs and testing platforms for developers, simplifying the integration process. While each bank may have unique mappings, the underlying engineering principles remain consistent across the board.
Ready to Automate Your Payments Processing?
If your organization is still on the fence about integrating your ERP system with your bank, our free consultation can provide clarity. We’ll guide you through the process and address any concerns you may have. Ultimately, integrating your ERP system with your bank enhances productivity, efficiency, and profitability. So, Get in touch with us today!
