Data Management Key to Streamlining B2B Payments

Vendor master data is a powerful resource that can optimize or degrade the outcomes of core business processes.

For companies, delays due to out-of-date payments instructions can create a cycle of poor user experiences, halting crucial payments that keep supply chains on pace and creating slow or canceled orders due to vendor payment failures.

For financial institutions (FIs), inaccurate data can interrupt third-party data validation processes in consumer-facing products and limit critical payments transfers to B2B clients network-wide.

Attaining Higher Rates of Straight-Through Processing

According to “The 2022 Digital Payments Guide for Corporate Payments,” a PYMNTS and LexisNexis Risk Solutions collaboration, one key to higher rates of straight-through processing (STP) is access to an enterprise resource planning (ERP)-connected treasury management system (TMS) that offers reliable vendor data that might range from payment instructions to near real-time user authentication that is easily updated in a vendor master data table.

Get the report: The 2022 Digital Payments Guide for Corporate Payments

Another important promoter of high STP rates is a data-driven vendor onboarding process that seamlessly integrates with existing business software. That’s because vendor risk assessment is critical for regulatory compliance, vetting vendors is an ongoing process, and know your business (KYB) standards may vary from region to region, but international regulations require a global outlook on risk.

Recent sanctions against Russia have provided an example of why any organization needs to ensure the accuracy of data, know who’s on the other end of a payment, have accurate banking information and see through the chain of transactions, Leslie Bailey, financial crime compliance strategy vice president at LexisNexis Risk Solutions, told PYMNTS in an interview.

“That’s where you’re seeing people in our space really taking a look at this and saying, ‘We know that people demand fast, we know that people want protection of their assets — how do we get them there in the best way possible without putting them at risk?’” Bailey said. “That’s what it’s all about.”

Read more: Transparency Key to Mitigating Real-Time Payments Risk

Automatically Enriching Vendor Payment Information

Enriching vendor payment information is not a linear process when completed manually, yet fresh data is crucial to ensuring an organization remains compliant through each vendor interaction.

FIs and businesses must review fraud prevention, identity verification, compliance and watchlist screening results in addition to basic credit risk assessments before deciding to onboard a supplier.

An ERP platform that offers extensive vendor screening and onboarding features can automate many of those tasks, allowing an organization to simply search for a vendor to find near real-time granular insights into their risk level and current payments instructions.

Selecting a Vendor Onboarding Technology Solution

Vendor relationships are too complex — and too laden with hidden risks — to enter into without exceptional data and powerful analytical tools at the ready.

Here are five key enhanced due-diligence features to look for when selecting a vendor onboarding technology solution with an ERP platform:

• Near real-time verification of vendor business status data, including automated watchlist screening.
• Near real-time verification of current banking data, payments instructions and risk indication at the point of capture.
• Automated global regulatory compliance screening inclusive of KYB, know your customer (KYC) and anti-money laundering (AML) mandates for all vendors.
• Instant authentication of vendor identity with automated forensic analysis of identity (ID) documents from the vendor’s country of origin.
• Robust, ongoing vendor risk assessment monitoring and automated vendor risk scoring features.