Are Painful Payments Hurting your Small Business?
May 9, 2018
Running a business is by no means a cake-walk. Having enough time and money to keep your dream going can be a delicate dance. Often, owners don’t even realize where they’re losing money. Simple things like making business-to-business payments can hurt your business a lot more than you might realize.
B2B Payments Can be Costly
The wonderful thing about having consumers is that, in ideal cases, they pay up front. On the other hand, it can take weeks before you see a dime of your B2B payment.
Worse yet, if you have a payment deadline to make, the recipient may not see the cash for a while either. Nothing’s worse than trying to factor in bill payments or sporadic transfer times all while trying to run a business.
Why can’t payments just get there when they need to be? The answer is a little complicated.
International Wire Transfers
When you send money overseas, your bank takes the money from your account. Then a route is created once the recipient’s bank is notified.
From there, your money travels from bank to bank through an international network called Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Not only is this an achingly long process, but because SWIFT handles only the account numbers and not your funds, your cash travels through several middlemen
Not only is this an achingly long process, but because SWIFT handles only the account numbers and not your funds, your cash travels through several middlemen. This makes it hard to track your money, creates unexpected fees, and can invites security threats.
Additionally, if you make even a minor mistake in the endless amount of paperwork, you usually can’t get the money back. There are countless horror stories of people having money sent to the wrong account, or the payment just being lost all together. Even if you tried to get the money back, it could take weeks – valuable time you should be spending on your business.
How to Avoid the Pain
Know your stuff
Whether you’re a buyer or supplier, knowing the options and competition out there can make the difference
Make sure the price you’re getting for your goods or services is fair. Whether you’re a buyer or supplier, knowing the options and competition out there can make the difference. There could be something even better overseas. To get an idea of where to start looking, check out our how-to guides and blogs on doing business overseas.
Have a plan
Budget, budget, budget. You should know where your money is going, when, and how much. If bills keep surprising you, you may have to take a look at your cash flow. Plus, predicting costs can help you know what you can and can’t do.
Use up-to-date accounting software
It is the 21st century after all, and you’re not living if you’re not automated. Programs like Xero, QuickBooks, and NetSuite offer great packages that not only help you track your bills, but payroll, inventory, invoicing, purchase orders, and more. With tax season right around the corner, these programs can keep you sane.
Communication is key
If you’re the supplier or service provider in the relationship, you need to put your foot down. Overdue invoices aren’t fun for anyone, and knowing the payment schedule will put your mind at ease. Knowing who’s in charge of paying you is essential. If there’s ever a problem, you can contact them directly to save time. It’ll also make your needs clear to the buyer, and can improve your relationship greatly.
The best way to handle your money is by using a next generation payment platform like Veem. When you send money through Veem, not only do you avoid unnecessary middlemen, but you can cut costs drastically. There are no wire fees and Veem offers competitive foreign exchange rates.
Once the recipient has been verified, Veem creates a connection between businesses , not between multiple correspondence banks.
The best part is you can send, receive, and reconcile payments with just a few clicks.
Sign up for free with Veem and say hello to the future of financial technology.