Benefits of Implementing a Digital Procurement to Pay Platform: This is the second post in a series exploring specific solutions available to the many problems identified under the heading of AP Problems. First in the series is AP Problem #1: High Defect Rates here…
AP Problem #2: Finding A Solution to Poor Supplier Relationships
A constant problem for any size of a business is getting the right partners working together in a component or service supply chain that allows a company to excel in serving their customers.
That is why so many business publications and commentators refer to a business supplier and the company’s supply chain as the lifeblood of their company. The problem that plagues AP invoice payment begins in the very first steps of making purchases, with or without, purchase orders.
But first, a focus on the value of your suppliers and supply chain. Your business will need to find a balance between making the supplier feel that they are a valued member of the team for their experience, expertise and product knowledge they bring, and balanced against the necessity to keep your suppliers competitive in their pricing.
Trust, but verify is appropriate in dealing with your suppliers.
This all works fine until a late payment or a miscommunication over what was ordered, against what was accepted at the time, and what was expected from various conversations that often occur late in the payables process. This is core to poor supplier relationships. This lack of a transaction order process is rife for a disaster in making relationships awkward as late payments frequently result from awkward purchasing practices.
An inefficient procure to payment process can lead to long lead times and invoice cycle times,
as well as supplier payments that are constantly late.
The result is damage to your most valuable supplier relationships.
The goal of the supplier is to sell more volume and do so more frequently.
Hence the logic that great suppliers will work with you to help drive down your production or assembly costs. Your suppliers can help your business by consulting and collaborating with you to find innovations that help them, and help you sell more, and potentially, at better pricing points.
That’s the ideal outcome. When your supplier acts like your business partner. To make sure that the relationship is enhanced, the supplier delivers on time with what they say they will provide. In return, your business turns around the supplier’s invoice within the agreed on a time, and may even earn a discount for prompt payment reduced off the invoice amount.
This is how everyone wins from being more purchasing process efficient. This is also where efficient payables processing technology can help by focusing both sides on getting the first step of an order management right.
Digital Technology in Purchasing and Payment is Key to Improved Supplier Relationships
Here’s how using technology can help keep the relationship strong and growing in its ability to enhance both sides of the supply counter, if not physically, certainly virtually with better technology. With the right software, you can requisition and order within a dashboard that is shared equally with your supplier.
- When it comes time to amend the order or make performance adjustments by either side, everything is recorded and stored in one place.
- This ordering process is programmed in so everyone on both sides of the virtual sales counter can know what the agreed on deal terms are to start.
- Then, later at payment time if needed, how the order was changed, and who authorized the changes.
- The process records along with any product availability information changes, or changes made by the supplier in order and delivery information are also confirmed and captured in the finalized purchase order that now has the corrected, complete and right information contained in it.
- The big bonus of electronic purchase and pay technology is that both the purchaser and the supplier have equal access to the dashboard tracking the order from start to finish.
At any point, either the customer or the supplier can use their software dashboard login to view the progress at any stage. The supplier can convert the Purchase Order(PO) to an Accounts Payable Invoice(AP Invoice), and the information and pricing details sent to their customer match for ease of payment authorization.
At SnapAP, we call this the Sweet, Suite Spot in our software platform, because exactly what was agreed to in product description, and in delivery timelines as well as price per unit of volume or service delivered description, is captured all in one place.
Again, everyone involved in the transaction has a shared view from either side of the order desk counter, as if it were a physical sales counter, instead of an integrated online process. This is what transparency in accounts payable means.
Accounts payable relationship management can be drastically improved with a trustworthy and
stress-free automated procure to pay process, ensuring that invoices are paid on time, every time.
That is the real solution to poor supplier management in a sentence.
Get it right the first time and pay on time to enhance your relationship with all your suppliers.
SnapAP’s paperless AP system’s portal provides complete transparency with a simple, user-friendly interface visually available in an attractive dashboard. The sequence of steps on the dashboard allows you to easily manage all your critical AP supplier management relationships.
There is a bonus to moving everything online.
- Your accounts payable department will enjoy the system’s simplicity and efficiency, and you and they will immediately see an increase in productivity.
- In addition, your cost of processing invoices will drop from high double digits to less than $2.00 per invoice. This can represent a huge saving in fixed costs.
- Meanwhile, your valued suppliers will benefit from clear communication and improved visibility, and they will not have to download any software or pay any fees.
- With SnapAP’s solution, you onboard your suppliers and they gain a great window of communication into your business, and you into theirs.
- As a result, your customers are treated like the partners that they are in your business.
For your business, you will no longer miss deadlines and bring unnecessary stress to some of your most important relationships. By paying on time with minimal stress to you, or your supplier, you will ensure that you become, and remain, a preferred customer, which will put you in a good position to negotiate better terms on future deals.
Beyond Cost Savings are the Benefits of Competitive Business Efficiency
However, please consider that saving money while important is not everything in the procure to pay processes for solving supplier management issues. The ongoing benefit is all about the competitive efficiency you gain from your supplier network. Suppliers become your virtual, trusted, product solution partners in keeping your business more cost-effective, and more process efficient.
You do everything you can think of to manage your customers and their expectations and experience with your business and one of the most important ingredients in how well you satisfy your customers is how well your supplier network works for you.
Adding automated purchasing and payment processing from SnapAP will ensure that you have the best of both worlds.
1. You will buy at the right price and enjoy the lowest, and best possible cost in procuring your
products and services for your business and your customers.
2. As a result, you will sell at the best margin, with the best product component assembly available
for your customers, and delivered at the most competitive cost point,
which will generate your best possible potential profit for your business.
All this success in solving the problem of improving relationships with suppliers starts with permanently solving your financial and communications relationship with your supply chain network by automating your complete purchase to pay process.
Please consider accepting our Demo offer of a 20-minute max explanation of exactly how SnapAP’s P2P software can help your business.
SnapAP offers a handy payables invoice costing calculator for you to enter your total number of payables invoices in and it will return a projected savings number on how much money using SnapAP can save your business just on your invoice processing costs alone.
In addition, you can realize further savings from your enhanced efficiency savings rates from replacing your manual payables processing.
We have wonderful user reviews from satisfied SnapAP customers and you can learn first hand what they have to say about using SnapAP’s paperless software system. Here’s another recommended link for more information to learn more about how SnapAP’s software can bring organization and clarity to your accounts payable for prompt supplier invoice processing.
Our anchor marketing message says it all.
SnapAP: Optimizing Your Accounts Payable Process from the first steps of requisitioning orders, to the final steps of supplier invoice payment, you are covered with SnapAP proven best practices in procure to pay. Once installed, SnapAP becomes a core internal business efficiency for your business.
Our first post, AP Problem #1: High Defect Rates in this series on Benefits of Implementing a Digital Procurement to Pay Platform is available for learning more about SnapAP and what is can do for your business.