Improving Supplier Relationships with Automated AP

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Your procurement team has been hard at work scouting and onboarding vendors that can take the company to the next level. However, it’s the AP team that keeps these relationships on firm foundations. Late payments can strain or even destroy otherwise positive supplier relationships – even if the cause is due to a small error. And errors are common. Due to manual processes, AP staff end up spending up to three hours a week or more correcting errors and other issues. At the same time, time-consuming processes often prevent AP teams from capturing early payment discounts. The key to stronger vendor relationships is an efficient AP process.

How can AP support stronger vendor relationships?

Positive vendor relations can ensure that the internal supply chain runs smoothly and securely. A disorganized approach to supplier management can result in openings for fraud, while also reducing trust and increasing friction between suppliers and the company. The AP team is on the front line of supplier relationship management. Ensuring that a vendor is paid on time, every time is the best way to keep the supplier relationship in good standing. And there are many ways a accounts payable department can keep vendor strong supplier relationships. But the top three ways AP teams can truly build long-lasting relationships are through three factors:

Improved onboarding

The first step to building a supplier relationship is setting expectations. A solid approach to vendor onboarding makes things easier for the supplier and the AP staff. Generally, the vendor needs to know when they will be paid and how.

Clear communication

Having a clear set of guidelines for timely payments, late payments, contact information, and the overall AP process builds trust and ensures that potential problems are taken care of quickly. Poor communication can result in late payments, open up the door to fraud, and set unclear expectations.

Visibility

An active accounts payable department can supply its own accounting and operations team with improved supplier information. This is doubly true for an AP team that makes use of electronic payments and an automation solution.

Manage Supplier Relationships with AP Automation

AP automation is the underrated solution for seamless and strong supplier relationships. Through automation, the accounts payable department can accelerate payments and invoice processing, streamline communication, keep an auditable trail, and close loopholes for fraud and “lost” documentation. At the same time, automation provides opportunities for 100% visibility. Only relying on an ERP, without proper AP automation, means that you are still sifting through documents manually. Only instead of stacks of paper, it’s an endless flow of files. This exacerbates processing times, and thus extends payment days. This can stress supplier relations as their cash flow is under pressure. But best-in-class automation can work wonders. An AP department with an automated AP process can expect to cut their processing times by 74% while only paying a fraction of the expense. At the same time, the amount of suppliers willing to send electronic invoices doubles. Not only is it easier to onboard key suppliers, but the AP staff can retain payments data. This information can be used to make strategic decisions about supplier relations and cash flow.

Take the next step

Ready to set the foundation for stronger supplier relationships? Intelligent AP automation makes it a cinch to streamline time-consuming processes and keep vendors happy. More than general machine learning or AI programs, intelligent automation learns as it accumulates more data for improved optimization. To learn how Itemize can help your team unlock value in your AP workflow, schedule a demo with us today.