Businesses rely upon their vendors to provide on time supplies and services, and their success hinges upon a successful working relationship that supports a strong and continuous supply chain. Companies can’t afford to lose vendors due to an inefficient accounts payable process that results in late or lost vendor payments.
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When a company’s AP process is automated (using non-supplier networks, of course—see our last blog post for why supplier networks are a bad option), the relationship with a vendor can take precedence and the vendor’s payments are more likely to be on time. It’s truly a win-win situation in the company-vendor relationship. Eliminating manual tasks frees your accounts payable staff to focus on value-added tasks such as reporting and analytics, increasing communication with vendors, better maintenance of the vendor master, negotiating more early-pay discounts, helping error-prone vendors, and strengthening fraud controls.
With AP automation, the AP team can provide enhanced data and analytics to their peers in procurement and management, so that they can better manage relationships with vendors. AP can provide the finance team with reporting on where late payment fees occur and identify pain points in the process slowing vendor payments down. This visibility can also help the procurement team identify any vendors that are not applying contracted terms, as well as vendor relationships that may be compromised and in need of personalized attention. Your vendors will also appreciate your move to AP automation when they realize they can login to the system to get the status of their payments anytime, using the Vendor Inquiry tool. Happy vendors is what you want, right?
A great example of how AP automation can support stronger vendor management is Wente Family Estates. Wente Family Estates, the oldest, continuously operated family-owned winery in the United States, started using the DataServ Purchase to Pay (P2P) solution to automate their accounts payable in 2009. Wente improved their relationship with various vendors as a result of the enhanced visibility that DataServ provided their AP staff. “More invoices are being paid on time because they are not getting lost on someone’s desk,” Sebby Hansen, Wente's Accounting Manager, explains. “They are either emailing or faxing them and they are going right to DataServ, and it’s not like ‘Oh, I forgot I had one in my email – I forgot to print it out for you.’ Invoices are paid on time more frequently, and they aren’t getting lost.” Another benefit of AP automation is a greater ability to track vendors that offer early payment discounts, and DataServ has made it much easier for Wente to ensure they take advantage of these discounts. “Because of the increased visibility DataServ provides and because invoices get to DataServ right away, we can pull the invoices out sooner,” says Regina Jaderstrom, Wente’s Corporate Controller.
The time-consuming intake, tracking, and processing of invoices is not a good use of your team’s time. After AP processes are automated, employees can be freed up to do what people do best: communicate with vendors and foster more mutually beneficial relationships, including negotiating early-pay discounts, nurturing new vendor relationships, or helping to improve costly vendor payment problems like fraud and error. After your company has a tailored automated solution, your staff will be forward looking.