It is no secret in business that making payments to vendors can be difficult for suppliers at times, especially from smaller businesses. It has been observed that organizations were paying their small vendors after a month than the larger firms. Slow payment is considered a system-wide disease in the economy. But the smaller a vendor you are, the tougher it is to get paid what you are owed timely.
There are several reasons that it is within a business’s best interest to boost its supplier payment method no matter how small the suppliers might be. The non-payment presents a challenge for smaller organizations that may struggle to keep the numbers already balanced. It is just a poor business practice.
It isn’t challenging to make enhancements. Read on to know why and how you must enhance the supplier payment procedure with an AP automation system.
2 Reasons to Boost Your Vendor Payment Procedure
Here we present the reason to invest in accounts payable automation in order to deliver a better process today- for suppliers and the business.
1. Quick Payment Makes Sure Future Work
Trustworthy suppliers are difficult to come across, specifically in the era of the internet, where another staff is always a click away, but with little to no assurance that they will understand what they are performing. Hence, whenever a business looks for competent vendors, they will need to do whatever they can to keep them satisfied. An excellent way to do it is by paying bills early or on time.
Getting people paid quickly ensures they will not only do the future work with your business, but also it will remain a priority to them. Also, it might lead them to extend early payment discounts, basically around 3% that too many organizations still fail to get.
2. Accounts Payable Functionality Aids Processes and Staff
There are multiple advantages of an accounts payable automation solution based on its functionality. It has been observed that many businesses have started using supplier payment method automation for the fundamentals of accounts payable workflows from invoice receipt via payment.
By minimizing the time spent on the approvals, handling invoices as well as payments –supplier relationships become strengthened as the payments are on time. Moreover, the AP employees’ morale enhances when the repetitive task gets eliminated from the equation with automating accounts payable and suppliers are not enquiring if the invoices will get paid.
Make Vendor Payment Method Better
Here we present a few ways to do it.
1. Reporting with Regular Reconciliations
AP is complicated work, through each step of the P2P method for multiple invoices that the average organization deals with in the course of a month. The volume and pressure indicate that even with a good accounts payable team and clerks, a few payments can slip through the cracks easily.
It is up to the business to deploy an updated financial and accounting method as fast as possible. One way to do it is via regular reconciliations, which is having workers validate every day that AP balances match what is in an organization’s GL.
2. Get a Robust Accounts Payable Solution
Earlier, several organizations built their accounting software using internal IT employees or costly consultants in order to design proprietary and outdated programs. Keeping the systems running seamlessly was expensive and became a burden to upgrade them as new rules and accounting practices evolved.
But now, all of it has been transformed with cloud-based accounts payable software. With responsive suppliers, such solutions can be updated automatically multiple times every year according to the business requirements.
Getting an AP system that can be up and running smoothly within a day, aids ensure a supplier payment method is never out of date.
3. Surprise Vendors with New Features
The average vendors have gotten used to organizations that don’t pay them or make late payments. Hence, they will be thrilled with the outcome of accounts payable software that can provide supplier payment procedure enhancements like:
a) Automatic processes and routing designed to receive invoices to mandatory approvers
b) Safe record keeping
c) Monitoring and analysis that aids guard against payment of duplicate invoices and fraudulent activities
d) Contractual date reminders
Use a Solution That Will Scale as The Supplier Payment Method Evolves
An organization’s supplier payment method must always keep developing. What works right at this moment may not be the best fit after some years between external aspects like changing federal laws and state and internal factors like modern accounting practices or business rules or guidelines.
The fact is, businesses require automation that can scale and evolve with them. It will aid a business make supplier payment procedure enhancements before they know they have to implement them.