How to improve supplier relationship management?
While scouting and onboarding vendors are the jobs of the procurement team it is the accounts payable department that is responsible for maintaining these relationships.
Any delays or errors you make in processing invoices and clearing bills will inevitably harm this relationship which in turn will most definitely have detrimental consequences for your business.
Therefore, accounts payable vendor management is a very important function of the accounts payable department. An efficient accounts payable process is key to improve supplier relationship.
For the smooth running of internal supply chains, positive vendor relationships are paramount. Approaches to supplier management that are disorganized can lead to fraud, while also increasing friction between your company and its vendors.
The AP team is at the forefront of managing these supplier relationships. The best way to keep vendor relationships healthy is to ensure they are paid on time with minimum fuss. There are many ways to how this can be achieved.
Vendor portals can be a boon for AP teams trying to keep the vendor management process in accounts payable healthy.
• Better onboarding process: Vendor portals make it much easier for vendors to onboard and upload their details for the AP team to work with.
This ensures that vendor details are always at hand for the AP team and there has to be no back-and-forth asking for important information that your teams should ideally already have.
• Invite vendors into the invoice conversation: Conversations with vendors are an important part of maintaining a healthy relationship with them. Often there will be cases where clarifications will be required for an invoice to be processed properly.
• Increased transparency: Vendor portals also come with the advantage of increasing transparency. These portals are designed to hold all information related to vendors and the status of payment.
Therefore, vendors don’t have to take the hassle of getting in touch with your AP team every time they want an update. They can simply log into the portal and check the invoice status.
Timely payments are your AP teams’ best friend when it comes to vendor management process in accounts payable. There are few things that make vendors and suppliers as happy as timely payments do.
• Make invoice approvals process fast: Faster invoice approvals will directly lead to faster vendor payments. For faster invoice approvals you need to ditch the manual approach to invoice processing.
Instead, use an AP automation software that can receive, process, and pay invoices on its own. This software can do the same job in a fraction of the time required and with zero errors.
• Foster vendor relationships: Timely payments will most definitely foster healthy, long-lasting vendor relationships. Missed or delayed payments are arguably the biggest pain points that vendors have to deal with.
You do not want to fall into the vendors’ book of people who are regularly late. Instead, if you can make a place amongst the ones that pay bills on time you’ll definitely win a load of perks and goodwill from vendors.
• Get early payment discounts: Timely payments will not only foster healthy vendor relationships but they can also win you a host of perks and discounts from vendors.
To ensure vendors get paid on time they often offer discounts and other perks to businesses that make timely payments.
The best organizations out there are the ones that make the best use of the data gathered on key performance areas. The same goes for the data you can gather on your accounts payable process.
Not only can data tell you where you can improve your accounts payable process but by doing so it can also help you maintain healthy relationships with vendors.
• Identify bottlenecks in the AP process: If you regularly hit snags in AP then your payments, and consequently your vendors, are bound to suffer. Use data analysis to understand where these bottlenecks are occurring and address them.
• Strategize and reduce friction: Any friction that happens between different steps in the process involved must be eradicated to ensure a smooth vendor payment process.
• Boost efficiency and save more: Managing and analyzing AP data accurately is essential to boosting efficiency. Not only does it help you develop a faster process but it can also help you earn those special discounts from vendors.
AP automation is a great solution for strong and seamless accounts payable vendor management.
With the help of automation, accounts payable teams can speed up payments and processing of invoices, strengthen communication, maintain proper audit trails, and eradicate channels of fraud and misplaced documentation.
Additionally, automation on AP increases your visibility level to pretty much 100%. Relying only on ERP, without any automation, ensures that you will be stuck sifting through piles of documentation manually.
Just in place of stacks of paper, you’ll have GBs worth of files. This prolongs invoice processing times and therefore accounts payable days. Consequently, this can put stress on your relationships with vendors because their cash flow will be harmed.
However, modern AP automation tools can work wonders in this context. An AP department with an automated AP process can expect to cut its processing times by 74% while only paying a fraction of the expense.
Not only is it easier to onboard key suppliers, but the AP staff can retain payment data. Using this information strategic decisions can be made about supplier relations and cash flow.
Keeping vendor relationships healthy and secure doesn’t have to be as difficult as it sounds.
In fact, modern accounts payable solutions like Volopay are able to not only assist with vendor management process in accounts payable but also make it a much smoother process.
Volopay comes with comprehensive accounts payable management dashboard that gives you complete control over vendor payments. It gives you the ability to view and control all payments from one place.
Additionally, Volopay also lets you customize and schedule automatic vendor payments so that you never have to miss a payment date ever again. You can simply set up payments and let the system handle the rest.
With Volopay early payment discounts and offers are a guarantee because the system is designed to assist you in making timely payments.
Not only this but you also get in-depth accounts payable data to help you identify and address bottlenecks in your vendor payment processes!