How streamlining the Accounts Payable function in a business improves vendor engagement and the company’s image
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Stakes for a healthy and growing business
A good relationship with stakeholders and partners is imperative to any business entity. Businesses generally aspire to be customer-centric and focus on timely deliveries, quality of work, and clear communication. Next, they try to keep their employees motivated by creating a good work environment and offering competitive benefits and intangibles. However, very often businesses tend to overlook their vendors in their priority list of partners.
The importance of vendor relations
Vendors of a company are an equally important community. They could be suppliers of raw materials, information, services, or just contracted talent. The list of vendors also extends to subscription services, time-based labor, or scope-based custom goods/services. Any business needs from a vendor timely delivery, cooperation, and most importantly, support especially when something unplanned pops up.
More than contractual work it’s the role of vendors during an unprecedent time that matters to an organization.
Usually, the vendors are bound by contracts for the scope of work or order. However, it is the undocumented, tacit expectations during times of unplanned demand spikes or financial crunches, when a business has the greatest need for their vendor.
To build this kind of dependability, the organization needs to develop a partnership with vendors that is trusting and has mutual respect. A business expects its vendors to keep the vendor’s end of the bargain. The least the business can also do is to keep the business side of the bargain as well: that is, to pay the vendors for the goods or services in timely manner.
Any misses on this front could create a cashflow problem for the vendor. Repeatedly missing on the payments may be detriment to the client company getting a preferred customer status from the vendor and their best price. It may also cast a shadow on the image of the company among the supplier community.
Transparent dealings where both the business and the vendor keep their end of the bargain with timely/quality delivery and timely payments for the delivery is a great way to achieve a trusting relationship. For this reason, a business would need a well-defined Accounts Payable (AP) process and a well-lubricated AP system.
Delayed or incorrect payments create similar reputation of the client organization as a delayed or poor-quality product/service from a vendor.
How CES helps its customers keep vendors happy
CES has been helping customers develop and streamline AP processes for many years and has been indirectly relieving them off the stress of payment-related processes with a well-developed AP process that facilitates smooth transactions between the organization and its vendors. Our process is wholesome and includes –
- Reviewing and documenting AP process
- Streamlining the process
- Centralizing AP mailbox
- Identifying payment accounts and coding
- Getting process approvals
- Reporting templates
- Identifying key systems interfaces for the process (Ascend, Workday, etc.)
- Establishing the integration across operating bank accounts
- Executing the process offline in a cost-effective manner
- This includes new vendor setup, ongoing vendor maintenance, monitoring AP mailbox, performing expense audit, scanning & indexing of invoices, validation, financial approvals & allocation, coding or tagging payments, processing payments, and reporting. In addition, CES does 1099 (tax) processing to help the business prepare and distribute year-end tax returns.
Reaping the benefits of a well-defined AP process
A good AP system maintains the continuity of services without interruptions with less paperwork (subscriptions won’t be shut off). It will keep the cashflow accounts predictable and optimized. An accidental late payment also may lead to unwanted penalties and even attract negative comments which does not speak well for an organization. A well-developed AP system and process eliminate such uncalled-for possibilities and enhance trust. A happy vendor might vouch for the ‘trusted client’ in industry forums, earning its client a name in the market. Timely payments may even result in the vendors keeping their prices low. Some vendors may in due course become the eyes and ears of the organization and provide intelligence on the trends and competitions in the market.
A good AP system could also be used to track expense reports submitted by the business’s internal employees and to make timely payments to them, thus, enhancing employee satisfaction. In a nutshell, with a well-oiled system, businesses can reduce the cost of operations of AP function significantly.
Less paperwork, efficient and streamlined processes in a cooperative environment are just some of the long list of benefits
We live in the world of karmic reciprocity. While customer is the king, it requires the good graces of the vendor partners along with the business’ employees to keep the business running and make the end-customer happy. The ecosystem of vendors, with a streamlined AP process that delivers timely payments to vendors, could turn the vendor community into an easy ally of the business leading to its growth. For more information or a conversation on how CES can help streamline your Accounts Payable processes, save cost, and improve vendor relations, please contact us at firstname.lastname@example.org.