Payment processing is a pain point for business customers. By using technology to automate payroll, taxes or services, banks can help their SME clients
Technology empowers banks to become the best allies of their business customers, providing them with digital support and financial solutions in areas critical to their growth.
It’s an alliance that has potential for both players. For banks, because they take the lead in transforming business processes, while building a lasting relationship with customers; and for companies because they can save time and resources previously spent on cumbersome and manual activities, such as tax and payroll payments.
The catalog of services that financial institutions can offer their business clients is broad: from platforms to facilitate factoring, to benefit management and controls for different profiles within the organization.
These solutions generate value for large companies with thousands of workers and complex organizational structures, as well as for small and medium-sized enterprises (SMEs) with generally manual processes, which can automate the bulk of their activities. For example, the French neobank Qonto offers digital accounts for payroll and bill payment, solutions that they intend to offer to 500,000 SMEs in Spain by the end of 2023.
The opportunity is there - and the financial industry has an important differentiation potential in digital enterprise solutions.
Payroll is one of the most burdensome tasks that companies go through on a monthly basis. The process presents compliance challenges associated with established dates as well as accounting challenges, as it requires balancing these expenses in the company's books.
Banco Santander noted the complexities of this process, and implemented a payroll payment service through its corporate electronic banking service. The service is flexible and adapts to companies of any size, allowing them to create payment orders from the virtual platform or upload them in Excel format, all in compliance with the regulations of the Single Euro Payments Area (SEPA).
This solution helps to save time and to ensure security. Plus, it speeds up payment of insurance and pension obligations and helps track overtime and days off.
Digitizing the operation is a relief for business clients, because it leaves behind manual data entry and significantly reduces errors. Banking becomes a strategic ally by simplifying processes, while businesses take care of other tasks.
In addition, if the company's income is received at the same bank that handles payroll, the institution can streamline and create more accurate balance sheets, resulting in an overview of the company that strategy and planning teams will appreciate.
Banks can also help a company's accounting area to manage payments to suppliers, services and taxes, tasks that are challenging with less up-to-date management systems. (Not to mention the risks of penalties if they are not properly covered).
Financial institutions have the technology to process payment orders easily, as well as helping to organize companies' finances. As such, the bank is another link in the process, facilitating the entire daily organizational operation and helping to save resources.
Banco Galicia of Argentina has a platform dedicated to helping SMEs to make mass payments and simplify the operation of obligations. Through office banking, the institution helps companies pay suppliers with checks.
Payments can be made by means of transfers that are credited on the same day. This solution manages, requests approval of payments and allows tracking of all transfers online.
Similarly, providing systems that automate the percentage of taxes or services to be paid also generates value for companies. It helps avoid defaults and increased expenses for late payments, something that no company wants to add to its outgoings.
And if the organization wants to implement a factoring system, the bank's digital platform can help them keep their invoices receivable in order, and advance those revenues to the business.
At the same time, the bank obtains valuable information on income and sales and this allows it offer more personalized lending terms to the business.
Banking can offer a wide range of solutions to corporate clients so that together they can bridge the digital divide and drive economic growth. The technology is ready – it’s just a matter of implementing it.
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