5 Payment Processing Pitfalls Every Therapeutics Supplier Must Avoid
For those who are operating in the industry of therapeutics, everything you do must help ensure a great experience for your customers/clients.
Maintaining a seamless, secure, and efficient payment process helps to avoid reputational damage, supply chain bottlenecks, and regulatory penalties.
In this guide, we’ll look at the five key payment processing pitfalls that are worth avoiding.
Reliance on manual and disconnected processes
A lot of therapeutic suppliers will rely heavily on manual invoice processing, as well as legacy ERP systems. This can ultimately lead to slow and error-prone workflows.
With a reliance on manual entry, it can increase risks of duplicate payments and errors, which cause delays in paying for the raw materials that then disrupt R&D and manufacturing timelines.
As a result, you should implement automated Accounts Payable systems that integrate directly with procurement in order to streamline workflows whilst also reducing any human errors.
2. Neglecting regulatory compliance
When it comes to therapeutic suppliers, they operate in heavily regulated environments. Failure to comply with such financial regulations can often lead to huge fines.
Overlooking the Anti-Money Laundering checks or failing to maintain HIPAA compliance for protected health information in payment records.
Partnering up with payment providers that are experienced in high-risk industries offers robust compliance. These include Know Your Customer/Know Your Business tools and data encryption. It’s also important to be aware of available merchant account for therapeutic suppliers so that you’re using specialized providers to keep your business compliant.
3. Inefficient chargeback and invoice management
Large, complex, and high-value chargebacks, it can often lead these businesses to significant revenue leakage.
The pitfalls of this are missing short response windows for chargebacks and relying on outdated spreadsheets instead of EDI systems. Failure to notify wholesalers of contract changes can be problematic, too.
With that being said, utilizing specialized chargeback management systems helps to validate your contract terms, automate contract updates, and manage EDI documents.
4. Insecure payment gateways and data handling
The sensitivity of data in the life sciences sector often makes suppliers the prime targets for data breaches and cyberattacks.
Using unencrypted and non-PCI, DSS-compliant systems will leave your sensitive financial data exposed as a result. Therefore, it’s imperative ot ensure that compliance is in place. Using robust and encrypted payment gateways that offer 3D Secure 2.0 authentication helps strengthen those payment processing efforts.
5. Inconsistent supplier/vendor payments
Delayed payments will often harm relationships with suppliers who are critical to the business. Missing any payment deadlines or neglecting early payment discounts will often cause further fallouts and some suppliers walking away.
The use of automated cloud-based tools is useful. It can offer real-time visibility into financial status. You can set up automatic payment alerts this way and have a centralized approval workflow to ensure payments are made on time and never missed.
These payment processing pitfalls are certainly good to know, especially if you’re a therapeutic supplier yourself. It can help you avoid the mistakes others make that end up putting them under and ruining their business.
