In business, it’s crucial that you establish and maintain a good relationship not just with your customers, but also with your vendors. Besides time-tested habits like being honest and communicating effectively, new technologies that enhance the efficiency and accuracy of your transactions, such as accounts payable (AP) automation, can also help get your business on your suppliers’ good side.
What are the benefits of a good vendor relationship?
Your vendors provide the supply that satisfies your customers’ demand, which makes them essential for your business’s success. A strong relationship with your vendor means:
- Decreased costs
When you’re on good terms with your vendor, you can negotiate beneficial deals for your business. For example, you can ask for lower prices for bulk orders or reduced shipping fees for certain products. These reductions can allow you to offer your products at a lower price, making what you offer more attractive to consumers.
- Improved efficiency
The better and longer your relationship with your vendor, the more you understand each other’s business and needs. You’re likely to exchange feedback too, which both of you can use to enhance the efficiency of your transactions. This can result in fewer delays, which can shorten time to market and augment your ability to earn revenue.
- Stable pricing
The rapidly shifting prices of raw materials can lead to fluctuating prices in the finished products, too much of which can scare away consumers. But if you have your suppliers’ trust, you can negotiate more stable raw material costs from your vendors in exchange for longer-term contracts, for instance.
- Better customer service
Some vendors pick favorites — if you are on good terms with them, they will prioritize your business over others. This makes you at less risk of experiencing availability problems and more likely to be given high-quality products. These perks translate to better service to your customers.
How does AP automation help build your vendor’s trust?
AP automation solutions like PaperSave streamline your accounting process, which leads to smoother transactions with your vendors. The technology lets you:
1. Pay your vendors on time
Suppliers like businesses that settle their payables on time or earlier than the appointed due date.
AP automation lets you process and approve payments faster than traditional, paper-centric invoice management methods do through features like document capture.
For example, PaperSave lets you capture data from photos of invoices you took using your smartphone camera. PaperSave’s Electronic Document Imaging technology converts the captured data into digital files that are automatically sorted and stored in cloud servers. With this feature, your accounting team can finish invoice processing within seconds.
2. Reduce the risk of errors
High-tech document capture does more than just accelerate invoice processing — it boosts recording accuracy too. It does this by eliminating the need for manual data entry, which can be woefully prone to mistakes.
Any inaccuracy while encoding invoice data can translate to erroneous payments to your vendor. Moreover, even if mistakes are spotted, it would take time to correct them, increasing your risk of missing the payment due date.
3. Prevent invoice fraud
In most cases of invoice fraud, fraudsters send fake supplier invoices to their victims. The victims think they’ve successfully paid their dues, while the real vendors think their customers are neglecting their payables.
Invoice fraud can be prevented with a stringent three-way matching process. This method involves checking and comparing the purchase order, supplier invoice, and shipping details that came with the purchased products. AP automation solutions do this process automatically, reducing the risk of inconsistencies.
What’s more, AP automation creates a document trail that allows you to track your company’s purchases and payments. This transparency minimizes the risk of misaddressed and multiple payments.
helps businesses to maximize the efficiency, accuracy, and security of their AP process, which consequently benefits both their customers and vendors.
Discover how our products contribute to lasting relationships between your business and crucial parties by scheduling a free personalized demo today.