60% of all vendor payments made by restaurants are cheques
Cheques declined from 57% of total Kenyan payments to 21% in 2021
Kenya's sole cheque printer shut down in January 2023.
Hospitality finance managers must make digital payments a core part of their vendor management strategy.
The hospitality industry in Kenya has been heavily reliant on cheque payments, with over 60% of businesses in the country still using cheques to pay their vendors. Despite that, cheque payments have declined from 57% of all payments in 2010 to less than 27% in 2022, and now, Kenya's sole cheque manufacturer is shutting down.
Leading finance teams have put payments at the core of their vendor management strategy by following four pillars:
To maintain efficient vendor payments in the wake of the closure, Kenyan finance teams should consider the following four steps:
Adopt Digital Payment Options
Digital payment options provide an efficient and secure alternative to paper-based cheques. Finance teams should consider implementing mobile payments, online banking, or other digital payment platforms to streamline vendor payments. Digital payments can be easily set up and processed, providing fast and efficient payments that can help keep vendors happy.
Automate Payment Processing
Automating payment processing can streamline vendor payments and reduce errors. Automation can be used to schedule payments, send payment reminders, and reconcile vendor statements. This can reduce the need for manual processing and improve the accuracy and speed of payments.
Implement Vendor Self-Service Portals
Vendor self-service portals give vendors real-time access to their payment history and outstanding balances. By implementing such portals, finance teams can reduce the number of vendor inquiries and disputes, improving the overall efficiency of the payment process. Caantin’s software enables businesses to provide self-service portals to their suppliers.
Negotiate Payment Terms
Finally, finance teams should consider negotiating payment terms with their vendors. By working with vendors to establish favourable payment terms, finance teams can optimise their cash flow and reduce the risk of late payments. Negotiating payment terms can also help establish a more collaborative relationship between finance teams and their vendors, leading to better overall outcomes.
In conclusion, the closure of Kenya's sole cheque manufacturer has allowed Kenyan finance teams in the hospitality industry to explore new and more efficient vendor payment options. By adopting digital payment options, automating payment processing, implementing vendor self-service portals, and negotiating payment terms, finance teams can streamline their vendor payments and improve their overall financial performance.
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