When it comes to making financial transactions involving customers and suppliers, it pays for small businesses to achieve a good level of transparency.
As well as enabling businesses to keep track of their finances and ensure their income and outgoings are correct and up to date, transparency is an important factor in running an effective organisation. It means payments made to suppliers and received from customers are dealt with in the most efficient way.
Think about a manufacturing supplier that has received a lower payment for the raw materials than it invoiced for. If it’s a small business, the shortfall in funds could lead to significant problems, unless it’s resolved quickly.
But if the manufacturer that owes the money uses virtual banking, a member of the finance team can quickly respond to a query by checking their account – either from a computer in the office or using a mobile device – to determine the reason for the discrepancy. By accessing the virtual record of payments, the manufacturer can swiftly address the issue and ensure that it’s rectified to the satisfaction of both parties.
The company that has purchased the goods can also see whether it has the funds to rectify the issue immediately. If not, the rapid payment capability that virtual banking supports means money can be quickly moved around to fulfil the payment obligation.
Any fees applied to transactions are also taken at the point of payment, meaning the money that moves in and out of the virtual bank account is not going to change with any fees taken at a later point. When there are hundreds or thousands of payments being made, this can help improve clarity further.
Being able to quickly keep track of financial transactions benefits the business with the virtual bank account, but also benefits its supplier base.
Customer payments is another area that can be optimised by the greater transparency provided by virtual banking.
Digital payments, the foundation of virtual banking, allow payments to quickly land in the company’s coffers, while enabling visibility of the funds they have at their disposal at any one time. Being able to monitor cash flow in near-real time helps with financial planning, particularly as the company grows.
Another aspect of customer transactions that the transparency of virtual banking makes easier to manage is issuing refunds. Customer service staff can quickly access the virtual bank account to view the payment received and then process the refund if required. The money will then shortly thereafter arrive in the customer’s own bank account.
Compliance is also an area in which transparency is hugely helpful. Being able to swiftly provide an overview or a more detailed analysis of company finances and payments with a few clicks of a mouse button makes the auditing process much less onerous.
Another relevant attribute of virtual banking is that it removes the need to maintain a physical paper trail, along with the amount of management time this takes up. Virtual banking also supports a cashless way of doing business, meaning there is less uncertainty about the amount of physical cash held by the business.
The added beauty of virtual banking is that all of these benefits will also apply to businesses that operate internationally, without there being any need to set up different kinds of payments, such as wire transfers. All payments can be managed within a single virtual bank account, regardless of the currency or country where payments are going to or coming from.
If you want to make your finances more transparent, virtual banking offers many options for doing so.