Accounts Payable walks a tightrope when trying to keep vendors happy. While managing internal communication during invoice approvals will always be Accounts Payable’s greatest challenge, keeping the communication lines open with various vendors regarding vendor invoices also requires a great deal of time and effort. However, Accounts Payable’s interaction with vendors presents a great opportunity to develop a solid connection that can be very beneficial to the whole company.
Here are three ways Accounts Payable can strengthen vendor relationships and ensure vendor invoices are properly managed:
1. Invite Vendors into the Invoice Approval Conversation
After Accounts Payable dispatches an invoice for approval, sometimes a vendor’s input is required to verify or understand the nature of the invoice. For example, the assigned approver, and whomever else they have requested approvals from, may need to clarify details of the deliverables, to dispute pricing, or ask a question. Make sure that your approvers have a way to invite the relevant vendors to the conversation around each invoice, and make it easy for vendors to join the conversation and respond to these inquiries. This inclusion will rapidly accelerate the approvals process since no one has to go “off line” to have a separate conversation with a vendor. At the same time, it’s important to keep your internal communication private from anyone outside your own company.
2. Pay Vendor Invoices on Time
In fact, pay early. Take advantage of the early payment discounts offered by many vendors (management will be thrilled!). A recent report from Sage states that nearly 40% of SMBs experience direct negative impacts from late payments. Don’t be among them. Develop a reputation of being a company who respects payment agreements. The best way to ensure that Accounts Payable can pay a truly verified invoice on time is to make the invoice approvals process as fast as possible. Completing Step 1 will go a long ways toward accomplishing Step 2.
3. Provide a Vendor Portal
This optional feature will be a godsend to Accounts Payable at your company and for your vendors. When Accounts Payable invites vendors to their own unique Vendor Portal they can view the real-time status of all their invoices issued to your company, both paid and outstanding. This visibility will drastically reduce the amount of time Accounts Payable spends fielding phone and email inquiries. This saves time for both parties since the vendor invoice status information is clearly displayed within the Vendor Portal.
Treat your relationships with vendors as you would any important business relationship. Good communication is at the core of an efficient invoice management process. By allowing approvers to invite vendors into the invoice conversation, this in turn will help speed up approvals in addition to an increase in understanding for all involved. While also providing a collaborative spirit centered around the invoice with your vendor. Being transparent with them regarding their invoice statuses via a Vendor Portal also heightens the sense of cooperation and goodwill between companies. In the end, business is all about people.