Introduction
Businesses in the manufacturing sector face several challenges, from machine maintenance to raw material sourcing, production and sales.
In Nigeria, it is even made worse by macroeconomic issues like unreliable power supply and diesel costs, indiscriminate taxes, the country’s physical infrastructure deficiencies, limited access to credit and the cost of imported raw materials.
With the complexities around manufacturing, businesses around that industry can scale through these challenges by optimising their payments.
This article highlights five strategies manufacturing businesses can use to optimise payments to ensure a smooth cash flow and contribute to enhanced operational efficiency, improved supplier relationships and customer satisfaction.
The benefits of optimised payment for manufacturing businesses
We listed some benefits of optimising payments for manufacturing businesses; now, it’s time to look at them in detail.
Cash flow management
Streamlining payments can help manufacturing businesses to seamlessly collect payments from their customers and make disbursements to suppliers.
Making these payments happen efficiently and smoothly helps manufacturers meet production timelines and increase sales.
Supplier relationships with suppliers
Manufacturers depend a lot on suppliers to run a smooth production process, and payments play a huge part in the relationship between these two parties.
Timely payments instil trust, encourage collaboration and increase the chances of negotiations for more favourable terms and potential discounts for the businesses.
In seasons of scarcity, suppliers are more likely to prioritise manufacturers who consistently make their payment fulfilments.
Customer satisfaction
Payment optimisation is the ultimate game-changer for customer experience. For manufacturing businesses that deal with retailers and wholesalers, customer satisfaction is essential to keep the production process running smoothly.
Efficient payment methods massively contribute to improved customer satisfaction. Manufacturers that offer convenient payment options, such as online payment portals or mobile payment solutions, create a seamless customer experience, leading to increased loyalty, repeat orders, and positive word-of-mouth referrals.
Challenges in payment processes for manufacturers
Manual processes
Businesses in the manufacturing sector are mainly traditional, still relying on paper-based invoicing and manual payment reconciliation.
These processes are time-consuming, prone to errors, and impede scalability. Manual handling of invoices and payments often leads to inefficiencies, delays, and increased administrative overhead.
Complexity
The manufacturing terrain is complex, with different suppliers, partners and customers needing several requirements.
For example, each supplier might require its invoicing requirements and payment terms.
Customers might also prefer different payment methods and systems, further complicating the reconciliation process and increasing the chances of errors and discrepancies.
International transactions
With the intricacies of the manufacturing process, businesses in this sector face complexities in their payment processes. For example, a manufacturing business could encounter challenges related to cross-border payments.
These challenges arise from the need to source raw materials from various suppliers across countries and sell to customers in diverse international markets.
Cross-border transactions involve currency conversion, compliance with regulatory frameworks, and navigating through various banking systems, which can result in delays, increased costs, and potential risks.
3 strategies for optimising payments
1. Adopting digital payments
As we have pointed out earlier, manufacturers, especially in Nigeria and Africa, still deploy traditional methods of operation, including payment, but it’s a drawback.
Businesses must follow the latest trend in payment, digital payments to optimise payment and increase their chances of success,
Digital payments reduce errors and accelerate payment cycles, while digital payment tools can seamlessly integrate with accounting systems, streamlining the overall payment workflow.
Fincra is the right partner to help manufacturing businesses digitise payments. We can equip manufacturers with digital channels to collect payments.
Fincra’s Virtual Account service is perfect for manufacturers still used to the traditional means of collecting payments. With virtual accounts, manufacturers can collect payments in USD, EUR, GBP and NGN from anyone, anywhere in the world.
Other means of digitising payment include using a payment gateway allowing manufacturers to collect payments from cards, bank transfers, PayAttitude and Mobile Money (M-Pesa in Kenya).
Digital payments also power sending money and making payment obligations to suppliers and partners.
Fincra Pay-Out ensures secure and seamless local and cross-border transfers in more than 150 countries across Africa, Canada, the United States, the United Kingdom, Europe and the rest of the world.
2. Embracing payment automation
Manufacturing businesses must embrace payment automation to ensure keeping up with payments and commitments to suppliers and partners.
Automation eliminates manual intervention, reduces errors, improves accuracy, and minimises transactional costs.
Fincra can power automated payments to handle repetitive payment tasks, such as scheduling recurring payments, payment approvals, and reconciliations, saving valuable time and resources.
3. Adopting digital technology
This article highlighted the need to adopt digital payment as the first strategy, but adopting digital technology overarches that.
Businesses need to adopt digital technology in all spheres of their operations to have an edge in this competitive market.
Digital technologies like implementing supplier portals or self-service platforms allow manufacturers to collaborate effectively with suppliers to support the payment process.
These portals enable suppliers to submit invoices, track payment status, and resolve payment-related queries independently.
By empowering suppliers with self-service tools, manufacturers reduce administrative burdens, improve transparency, and strengthen supplier relationships.
Conclusion
The success of manufacturing businesses relies heavily on efficient payment processes, and Fincra possesses the expertise to assist manufacturers in optimising their payments.
Fincra enables seamless and efficient business operations with a comprehensive suite of payment tools.
From virtual accounts and payment gateways to automated transfers, Fincra empowers manufacturing businesses, providing them with the essential resources to succeed.
Create an account with Fincra to get started or speak with a sales rep.
