Optimising business operations with innovative payment solutions

Extended payment cycles compounded by complex claims submissions and lengthy approvals can create significant challenges for business owners. 

The typical waiting period for payment, which can range from 35 to 100 days, places an undue strain on working capital, hampering business owners’ ability to manage cash flow and carry out day-to-day business operations. This delay not only impacts immediate financial resources, but also hinders long-term strategic planning and growth. 

The COVID-19 pandemic exacerbated these issues for numerous companies, particularly those in the construction industry. According to UOB’s Business Outlook Study 2023, inflation, rising operational costs, higher interest rates and insufficient cash flow were the major issues impacting businesses. Smaller enterprises – defined as those with less than S$10 million turnover annually – experienced greater challenges than their larger counterparts. Two in five reported an increase in operating expenses, and almost one in three cited insufficient cash flow as a factor that affected their bottom line.

Despite the easing of economic pressures and construction output approaching pre-pandemic levels, lengthy waits for payment continue to be a common concern. The Singapore Business Federation’s National Business Survey 2022/2023 revealed that close to a third of companies agreed that the strategy of deferring payments to vendors is crucial to maintaining working capital. 

Ms Adeline Kim, country manager of Singapore and Brunei for Visa, added that the escalating operational complexity faced by expanding companies contributes to late payments. This complexity leads to process inefficiencies that take up time and resources.  

She also noted that although there have been advancements in procurement systems, “payment is often still a separate process despite being a critical element in a company’s cash flow”. 

MAKING PROCURE-TO-PAY SWIFT AND SEAMLESS

To address these challenges, Visa has forged a deep-tier financing partnership with fintech start-up Doxa Holdings International. This collaboration – the first of its kind in the Asia-Pacific region targeted at the construction sector – aims to provide contractors with expedited access to working capital via a streamlined procure-to-pay digital solution.

Doxa Holdings’ flagship product, Doxa Connex, currently utilised by over 1,000 companies, seamlessly integrates enterprise resource planning, accounting and supplier management. This enhances the end-to-end procurement process by providing a swift, secure and efficient trading experience.  

Developed as part of the Visa Accelerator Programme, the enhanced Doxa Connex solution is tailored to the needs of the construction industry, bringing contractors, subcontractors and financiers together on a single platform.

“With development projects that span years, typically involving hundreds of subcontractors, the biggest challenge for construction companies lies in the highly manual workflow of reviewing and documenting progress claims, certification and payments,” explained Mr Edmund Ng, co-founder and CEO of Doxa Holdings International. “This leads to poor data flows and, consequently, slower payments to subcontractors.” 

The extended version of Doxa Connex offers features such as a Building and Construction Authority-compliant subcontractor module that handles progress claims, payment certificates, variation orders, rounding and batch payments for multiple invoices. These tasks are efficiently managed within a centralised, collaborative workspace, minimising the need for labour-intensive manual data entry.  

LEVERAGING VISA’S INFRASTRUCTURE TO UNLOCK VALUE

JTC Corporation and Kimly Construction are currently conducting trials on the new Doxa Connex platform by simulating payment processes for past projects. UOB is the first card-issuer partner in this innovative embedded finance solution. Through this strategic collaboration, subcontractors can receive payments for their services via UOB virtual cards once developers or main contractors certify the work claim – potentially even before the invoice due date. 

Ms Kim anticipates the addition of more banking partners to the Visa-Doxa Connex collaboration: “We look forward to working with other partners, using virtual cards for streamlined payments to suppliers. Our partners value Visa’s global reach, exceptional security and forward-thinking innovation, which collectively instil a high level of trust in the network.”

Inviting businesses to find out more about working with Visa, she said: “Our partnership with Doxa Holdings International is just one example of how Visa, together with our partners, unlocks value for our customers, simplifying operations for businesses that need it the most.”

Learn how you can partner with Visa to enhance your business operations.