For most companies, either big or small, managing payments for external vendors is a crucial and tedious task. It is the process of paying vendors which the business or the company has ties with. Maintaining solid relationships with vendors is an important part of the vendor payment process, and this needs to be done in a systematic manner. This is where AP (Accounts Payable) automation comes in handy.
By using automation in AP processes, lengthy payment procedures can be optimized with the use of digital payment systems. This can also help in keeping track of cash flow and data about vendors that would otherwise need to be inputted manually.
Why Improve Your Vendor Payment Process?
Manual invoice processes can cause delays for vendor payments. Since vendors are delivering their goods or services to the company, they need to be paid on time with the right amount. However, there may be discrepancies in terms of the Purchase Orders or bills that are sent to the company. Sometimes the payment process isn’t monitored by the parent organization and therefore, duplicate payments can occur. It is important to maintain a secure and healthy relationship with vendors and therefore companies need process improvement ideas for accounts payable.
How to Improve the Vendor Payment Process with AP Automation?
1. Set Up Vendor Payment Schedules
Making early vendor payments can enable your company to take advantage of discounts that the vendor offers. Taking advantage of early payment discounts can enable your finance team to manage cash flow and the creation of scheduled payments allows your team more flexibility to work on higher level tasks.
2. Pair Purchase Orders and Invoice Data
By matching the billing of the invoice with the ordering and receiving from the PO, invoice data can be transferred easily. Therefore vendor payment processes can be improved in a big way, thanks to AP automation. This can be done by companies looking into Easy Access Accounts Payable software, where the pairing of Purchase Orders or PO lines with invoice lines can be done seamlessly and touchless.
3. Make Systematic Payments
By ensuring that vendors are paid early or on-time and in a systematic manner, companies can strengthen their position with these vendors. Therefore, in the marketplace, other vendors or suppliers will have a positive outlook towards taking their business towards these companies. By improving relations, the entire supply chain can work better. One more aspect of this is that companies must make it clear to vendors – in case they cannot make payments at certain points and both the business executives and the vendors can come up with a common payment plan.
4. Track Vendor Invoices
Using automation software for accounts payable, invoices can be tracked easily. Therefore employees can find out which invoices are eligible for discounts and what the discount period is. So payments can be made within the agreed time period and can help improve relationships with vendors. This is especially true of Easy Access AP software which has an ‘invoice tracking’ feature in-built for businesses to partake of.
5. Improve Company Profile
By ensuring that vendors are paid on-time and in a systematic manner, companies can strengthen their position with these vendors. Therefore, in the marketplace, other vendors or suppliers will have a positive outlook towards taking their business towards these companies. So the supply chain works more effectively when companies combine AP efficiency with vendor payment automation
Therefore, by using automation software, such as Easy Access AP, companies can use the benefit of automated processes for ensuring cash flow is recorded and vendor payments are done in the right manner. These accounts payable process improvement ideas can be beneficial to the company as a whole.