Q: I run an insurance broker with ten direct agencies, ranging from car insurance to travel insurance. We work with a network of around 200 intermediaries and process up to 2,400 transactions every month with them. We’ve always used debit cards to settle these payments but this is causing a lot of difficulties in terms of reconciliation, administration and reporting. Help!*
A: This is a big challenge for any kind of business that works with intermediaries, from travel agents and mortgage brokers, through to property portals and financial advisors.
I can understand your frustration. The amount and type of information that you can capture on a debit card is usually pretty restricted. When you’re dealing with multiple agencies offering multiple services, that can be a real headache. You’re probably spending a lot of time trying to reconcile invoices and that’s slowing down the speed at which you pay your suppliers – which won’t win you any popularity contests.
You want to lighten that administrative burden and find an accounts payable process that’s swift, simple and allows you to process all the necessary transactions without the risk of being blocked if you hit your credit card limit.
To keep you on top of the authorisation process, you could look for a payments solution that has timing and amount controls. That would allow you to set the maximum value of every payment and the date range in which the payment may be claimed; you’d only pay what you’ve agreed, when you’ve agreed to pay it. You might also want to consider a system that captures accounting data for every payment and assigns a unique transaction number to each one (such as an invoice number, project code or purchase order), which could not only cut down all those hours of manual reconciliation but also reduce the risk of fraud.
If you can find a system that automates your payment and reconciliation processes, you’ll be able to focus on growing your business and expanding your network, instead of drowning in paperwork.
Alan Gillies is vice president and head of UK sales at American Express Global Corporate Payments.
LEARN HOW OTHER COMPANIES BOOST WORKING CAPITAL AND IMPROVE SUPPLIER RELATIONSHIPS BY CLICKING ON OUR CASH-FLOW HUB.
Want to discuss your cash-flow pressures? Call 0800 652 1279 or visit americanexpress.co.uk/corporate to find out more about how American Express Global Corporate Payments can help your business
* This is an example question