Relationships are at the core of every business success story. It’s exhibited in how customers engage with and become loyal to your brand. Inside your organization, it’s proven in how teams cooperate across departments. The same proof can be found in how you and your vendors work together.
Your AP team serves as the organization’s face to its vendors who provide tools and services that keep you operating. Their proximity to payees uniquely tasks them with creating strong working bonds. Within a single day, they could be peacekeepers when friction arises from delayed payments, or if payment details are inexplicably misplaced. They may also uncover cost-saving opportunities as a result of maintaining a positive relationship.
In response to stressed cash flows, businesses are making increased efforts to strike better deals with their vendors. But if you have a history of late or missed payments from surprise and misplaced invoices, your vendors may not be flexible when negotiating terms and rates.
Automation is one solution to preserve those relationships by getting your team out from behind the unknown and overdue. In time, you’ll forge stronger relationships, cultivate a willingness to work with you, and improve your DPO.
Here are four ways automation enhances payment strategy and leads to stronger relationships
- A win-win scenario Healthy relationships are mutually beneficial. Not only are you getting what you need to succeed, but you’re supplying the lifeblood of cash your vendors depend on. In short, the more successful you are, the more successful the vendor becomes. That success depends largely upon the efficiency of your payments. If you’re currently working with a clunky, manual AP process, that bond could be stressed by unnecessary friction.
- Timely payments Your manual process may also directly contribute to slow or inaccurate vendor payments. Both lead to increased occurrences of vendor inquiries, taxing employees in both companies while straining the relationship. Automating your accounts payable process ensures your vendors are paid on time. It also mitigates the reactionary frenzy born from surprise invoices arriving on your AP team’s desk. Visibility also arms the CFO with the necessary data to guide the organization successfully.
- Savings opportunities Quickly approving and preparing to pay invoices puts your AP team in a position to optimize how much you pay. When you’ve got a history of timely payments, you open the door for possible savings. Such savings include early payment discounts, more favorable payment terms, or alternate payment methods (like) that can offer additional rebates.
- Protect your reputation We’ve said it, you’re only as reputable as your last payment. Stepping up the efficiency in AP protects your vendors’ opinions of you as their customer. Not only your current ones but potentially others in the future. Bad news travels fast. Being known as a late or disorganized payer could follow you as new providers are sought. A streamlined payment process leads to more glowing reviews of your capacity to pay on time and accurately.
Being aware of how your current AP process may hinder your ability to maintain and nurture your vendor relationships is a major step toward building a healthy vendor relationship.
Similar to how personal relationships are formed, your actions as an organization speak the most about your partner potential. There are no star signs or Cosmo quizzes that help determine if you’re a good fit for your vendor. All that matters are your consistency, partnership, and timeliness. When you can secure those, you increase the opportunity to trade on the positive bonds you form.
Learn how an automated AP solution makes strengthening those bonds easier for everyone involved.