4 Options for Better Vendor Payment Management for BioTech Firms

Vendor payment workflows are often manual, time-consuming, and at risk for error. Today’s technologies bring automation and better data security, so BioTech firms can redirect staff time toward more strategic pursuits. Here’s how you can untangle the complexities of vendor payment management in BioTech.

Why is Vendor Payment Management So Complicated in BioTech?

The typical BioTech firm experiences:

• Complex networks comprise raw material suppliers, specialized laboratory and manufacturing equipment vendors, contract research organizations (CROs), and more
• Regulatory requirements from diverse agencies across borders
• International transactions with variable currency exchange rates
• Quality control and supply chain issues due to payment delays
• Payment volumes and timelines vary by vendor
• Internal integration issues between payment, tracking, and reporting platforms
• Data security issues, from adhering to data protection regulations to ensuring confidentiality

Getting vendor payments wrong can disrupt trials and derail plans. Yet many BioTech companies leverage manual processes for making payments, scattered across multiple systems including QuickBooks. Many log in to their banks and pay vendors individually.

How can BioTech companies better and more efficiently manage vendor payments?

Best Practices for Managing BioTech Vendor Payments

Effective vendor payment management is crucial to ensure smooth operations and maintain good supplier relationships. The following are in order of recommendation, with Option 1 being the most recommended due to lower costs and minimal setup required.

Option 1: Use Solutions Provided by Your Bank

Many major banks provide comprehensive payment solutions that integrate with NetSuite and other ERPs. Banks often use third-party platforms like FISPAN or Kyriba to enhance payment capabilities.

Embedded NetSuite processes enable vendor and employee payments via ACH, wire, and printed checks.

• Some international wire capabilities are available
• Supports importing bank data for cash reconciliation
• Streamlined approval processes for payment batches
• Automatically sends remittance emails to vendors

Option 2: Use NetSuite AP Automation

In NetSuite, you can streamline the procurement-to-payment process with this embedded tool. NetSuite automates invoice receiving, coding, payment, reconciliation and more. It significantly reduces manual processing. The module syncs vendor details and provides greater visibility into the AP process, including aging, pending approvals and payments. The functionality operates much like Option 1, but it does have a higher ticket price due to additional capabilities.

Some key features of NetSuite AP automation include:

• Robust payment capabilities, with embedded processes for vendor and employee payment via ACH and virtual cards. (Wire capabilities will be available soon.) Having a single source of truth for complex payment hierarchies keeps internal teams from jumping between systems.
• Imports bank data for cash reconciliation
• Automated invoice capture
• Batch approval processes

Option 3: Build ISO 20022 XML payment file using NetSuite’s native electronic bank payments.

With this file, you can process bank payments to vendors, partners or employee commissions, employee expenses and customer refunds. It also allows payments from third parties. Then, send the file to the bank. This option may not be for every business, as setup costs can be high and time extensive; ongoing maintenance to the payment file is also required. But once set up, it is easy to use.

Some of the features include:

• End-users can select payment-approved transactions for processing and can run multiple payment batches simultaneously.
• Supports multi-currency conversions to pay a global network of vendors in one payment run
• Generates Positive Pay reporting with checks issued no matter how they were produced

You can pay vendors using ACH, check, or wire—from one payment batch. Most banks support this process, and there are no limits on international wire transfers. The system syncs with native electronic bank payment batch approvals and automatically sends remittance emails.

Option 4: Use NetSuite’s Electronic Bank Payment Native ACH Payment File.

If more than 90% of your vendor payments are ACH, using the native NetSuite electronic bank payments add-on may be your most efficient option. But if fewer than 90% of payments are ACH, it’s a less useful tool because it leaves other methods to be processed manually.

The features of this solution include the ability to pay vendors and employees via ACH using CCD/PPD or CTX payment files, which are compatible with all U.S. banks. While BioTech companies must generate wire and check payments through auxiliary processes, the system supports native electronic bank payment batch approvals, ensuring smooth approval workflows.

Automated remittance emails are also sent to vendors, enhancing communication and transparency. This solution requires minimal setup and testing, making it a cost-effective and straightforward option for BioTech companies looking to optimize their payment processes.

Benefits of Better Vendor Payment Management

By prioritizing better vendor payment management, BioTech firms can:

• Save time
• Lower processing costs
• Reduce transaction fees
• Reduce manual intervention and errors
• Ensure timely payments to vendors, which can foster good relationships and possibly help secure better terms
• Accurately track cash flow
• Increase data security
• Ensure compliance with regulations
• Improve vendor communication and transparency
• Streamline the approval process and ensure disbursement control
• Quickly scale with the company’s growth
• Provide greater visibility into payment status and cash flow
• Release teams to focus on more strategic activities

Choosing the right vendor payment management strategy depends on your needs, transaction volume, and budget. Your bank may offer cost efficiency and a more straightforward setup. In contrast, NetSuite’s AP Automation provides advanced features and automation at a higher cost.

Sikich helps BioTech companies keep their tools and workflows moving forward. Talk with our team today about your options.