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How Fintech Advances are Shaping Inventory Management Workflows

International commerce moves today at a rate that’s faster than any other point in human history. As a result, a new type of service provider is emerging in the world of financial technologies. Fintech companies that act as intermediaries are starting to facilitated transactions between small businesses and the vendors that supply them.

Computer scientists have recently developed sophisticated algorithms that are capable of almost completely automating the workflows involved. Unfortunately for eCommerce concerns, inventory management continues to be the weak link in the chain.

This is forcing engineers to research revolutionary ways for companies to manage product inventories that don’t hold fintech providers back.

Dealing with Physical Stock in a Digital World

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Fintech companies aren’t used to managing physical material. Even hard currency can be dealt with on a mostly digital basis, which has completely eliminated any need for most firms to keep count of actual banknotes. Card readers and other pieces of computer hardware constitute the only inventory that most fintech firms have to deal with.

Wholesalers and distributors have to go through periodic physical stock takes to maintaining the accuracy of their inventory and reduce the risk of theft. Even the smallest of businesses can take a while to accomplish this task.

Engineers have recently deployed several algorithms on a trial basis that help companies update and refresh their inventory records before they begin a cycle count. These algorithms automate the workflow at least partially by comparing different sets of records and automatically flagging any differences. If all of the virtual online paperwork is correct from the beginning, then the cycle count shouldn’t take quite as long.

Card readers and other pieces of computer hardware constitute the only inventory that most fintech firms have to deal with

Financial technologists have also found one low-tech way for mobile retailers to reduce the necessity of cycle counts: they’ve encouraged them to never go out of stock on a product.

Mobile wholesalers that don’t run out of things to sell never have to file a backorder. That keeps fintech companies that handle payment details happy since they don’t have to wait for workers to process physical goods before money changes hands.

Changes Coming to the Inventory Hardware Market

Since the overall process is still rather slow, some technologists are looking at more esoteric methods of resolving the problem. Larger enterprise-level firms use RFID tags and other similar systems to collect telemetry about products they have on hand. The pharmaceutical industry has used various automated inventory processing systems for years.

Unfortunately, this doesn’t work for most small businesses because it represents a massive capital investment that they can’t afford. Even if they could, most mid-range companies have no reason to buy a great deal of hardware they’d suddenly have to maintain.

As a result, fintech companies are often left waiting in the wings while smaller wholesaling firms take inventory and shut down their entire operations. That’s where procure-to-pay services come into play.

Most fintech firms are heavily invested in cloud-based solutions, which makes it easy for them to offer these kinds of services. Integrated solutions like these support a process that begins the moment a client requisitions a purchase. It only stops once suppliers get paid. They enable buying firms to pass on some of the burden of payment administration to their fintech vendors, which takes a huge load off the wholesalers themselves. As a result, they’re more free to handle their manual tasks without having to worry about payment details.

The Rise of New Banks

Neo-banks are essentially startup fintech companies that offer basic banking services on the Internet. They’re competing with traditional banks who’ve held these lucrative market sector for as long as online financial transactions have existed. These are beginning to change the way that small businesses deal with their inventories, since they can help to further automate workflows and streamline the sales process.

While it might seem like digital banks couldn’t attract any customers since their business model makes it difficult to deposit cash, this isn’t a concern for online wholesalers. Since they take care of all their financial transactions over the Internet anyway, they can easily take advantage of this kind of banking opportunity and eliminate one more impediment they might have been dealing with.

The Role of Fintech Companies Moving Forward

While financial technology vendors have in some ways been hampered by antiquated inventory management processes, these same outdated techniques are quickly proving to be a major opportunity. New fintech startups are springing up with the hopes of providing more modern solutions to small businesses. The entrepreneurs who run these firms might very well be tomorrow’s online business moguls.

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