Engage Better Suppliers with Accounts Payable Automation

Engage Better Suppliers with Accounts Payable Automation

Engage Better Suppliers with Accounts Payable Automation

Among the many strategic growth initiatives that your company takes, keeping suppliers happy must be one of them. Vendors and suppliers are a critical part of strategic growth management and can be very effective accelerators if you are looking to gain an edge in business over your competitors. But keeping suppliers happy is easier said than done, primarily because you're not alone in vying for their business. In a tough competitive market environment, where every other company is looking to impress the buyer, it must be noted that there is heavy competition when it comes to sourcing the best suppliers as well.

“...More and more companies are seen investing in intelligent automation technologies with a view of ensuring business continuity in the event of any economic or social disruptions. A typical intelligent automation tool like accounts payable automation software can accelerate payments processing and help you forge the best supplier relationships in the long-run. But the benefits of intelligent automation are cumulative...”

Whereas buyers are key to your business moving forward and growing, suppliers are technically responsible for you being in business in the first place. The other important aspect of strategic business management is costs — the cost of goods purchased can and should be proportional to the final output and sales, if companies are to make any profits. A good way to contain the cost of goods is by keeping your valuable suppliers happy with timely payments for purchases made. Procuring goods at competitive prices and in a timely manner is key to ensuring accelerated sales and customer service.

Some of the things to follow as standard practice when dealing with suppliers:

  • Before you secure supplies from a vendor, you must determine the average number of days your company tentatively takes to make payments for goods purchased. The Days Payable Outstanding (DPO), as it is termed, must be a reference point for gauging the cash flows and determining the time frame within which you can afford to settle all payments for the goods thus purchased. A higher DPO number, as you would imagine, is a red flag — your DPO history should help you decide if you want to proceed with a supplier for the offer being made and whether you will be able to repay in full within the decided time frame.
  • Have your purchase department negotiate the best payment terms with suppliers. Typical payment terms like Net 30 or Net 45 allow you to make payments for goods purchased 30 or 45 days after receipt of invoice, respectively. Also, a good practice is to find out beforehand if the supplier is willing to change payment terms, in the event of a disruption. Payment dates can be extended as a precaution with certain terms and conditions attached like extending payment due dates by 20 days with a certain percentage interest charged on the original purchase price.
  • If your company is financially sound, it is in your best interest to opt for early pay discounts. Payment terms like 2/10 Net 30 help you secure a 2% deduction on the purchase price if you pay within 10 days rather than the stipulated 30 days, after receipt of the invoice. Meeting these terms help consolidate your relationship vendors further as you are able to assure them of timely payments.
Onwards to the advantages accounts payable automation software brings to companies:

Negotiate Better Supplies & Build Supplier Relations with Intelligent Automation

Technology can go a long way in getting the result you want with your suppliers. A good intelligent automation solution that supports automated accounts payable can help you accelerate payments processing, make payments to your suppliers on time, and steadily garner supplier trust and continued business. The pandemic and the ensuing disruptions it has brought with it have forced many businesses to stagnate or halt operations completely. If companies are to remain foolproof in the event of such disruptions in the future, they must have a mechanism in place to ensure continued operations without much dependency on manpower. Document-based processes like accounts payable and sales order processing are mission critical to the running of any business — the important thing to note here is that they also attract a lot of manual labor and operating costs. By ensuring that these processes are automated, companies can lower the dependence on manpower and reduce document processing costs dramatically. The result is a streamlined process automation system that can run and help businesses continue basic operations, without having to stop because of missing or reduced staff. More and more companies are seen investing in intelligent automation technologies in order to mobilize operations in the event of any economic or social disruptions.

A typical intelligent automation tool like accounts payable automation software can accelerate payments processing and help you forge the best supplier relationships in the long-run. But the benefits of intelligent automation are cumulative, and add to the process efficiencies and cost control achieved with optimizing such document-based processes as accounts payable.

Onwards to the advantages accounts payable automation software brings to companies:

  • Competitive Advantage: early and timely payments help build business momentum with suppliers, where you will be in a better position to negotiate quality goods at reasonable prices.
  • Compliance: intelligent automation brings with it a great deal of visibility into the AP process. You can keep track of pending or halted AP invoice processing jobs along an intelligent process automation platform, and be alerted of pending payments or payment discrepancies early. This helps your company comply with all payment policies and ensure that you honor your contract with suppliers without any disputes.
  • Audit Trail: an intelligent process automation platform integrated with your ERP/ECM system, helps consolidate and centralize all AP invoice processing. A central management of document-based processes such as this leaves a solid audit trail, needed for regulatory compliance.

Build the best and most viable supplier relationships by optimizing payments processing and accounts payable operations. An intelligent process automation solution for AP is your answer to maintaining long-term relations and trust with your suppliers.

Contact Us to learn how Artsyl helps companies accelerate accounts payable operations.

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