Ardent Partners recently published our annual ePayables report, “ePayables 2014: The Quest,” and, like all of our payables reports this year, the research is geared toward AP leaders, financial managers, executives, and those who aspire to these roles. The report presents a comprehensive overview of the state of accounts payable, as well as focusing on ePayables technology and systems in addition to providing a way for accounts payable teams to benchmark themselves against the Best-in-Class and improve their overall performance.
We spoke with over 190 accounts payable, finance, and other professionals across 25 different industries to give our readers a complete picture of the state of the market. The report is available for free (registration required) at four report sponsor sites: Tradeshift, Taulia, Basware, and Ariba.
Three Tips for Better Buyer-Supplier Collaboration
Suppliers are critical to your business’s success. Not only because they supply the necessary materials for your product, but also because a rich relationship with your suppliers can save you money in the long run. The only way to make this happen, however, is through a rich collaboration and engagement strategy that leaves both parties feeling good for lack of a better phrase. Here are a few tips, based on our recent ePayables 2014 report, which will help with this particular relationship.
Tip 1: Develop a Regular and Proactive Communication Plan
Think back on the last time you heard about something important after the fact from a vendor, or had to chase down a customer service representative at a utility for an answer. It didn’t give you a good opinion of the company afterward, did it?
That’s what your suppliers feel like when they need to contact the AP department to find out about their invoice status or when they will receive a payment. Suppliers are, now more than ever, critical business partners in driving organizational success and accounts payable is in charge of an important part of the relationship: invoicing and payment.
When your AP team takes too long to process an invoice, doesn’t or is unable to respond to a supplier inquiry, or doesn’t pay on time, that damages the relationship. To alleviate this, we suggest creating regular and proactive lines of communication with every single one of your suppliers. The more open you are with your suppliers, the better your relationships. That’s why you need to develop a communication plan, so your suppliers are never left in the dark about the status of their invoice or payment.
Tip 2: Consider a Supply Chain Finance Solution
Let’s face it: everyone likes getting paid sooner rather than later. Your suppliers are no different, which is why Best-in-Class AP teams in Ardent’s “ePayables 2014: The Quest” report are 53% more likely than all other companies to efficiently capture early payment discounts; they’re 56.3% more likely to have implemented a supply chain finance solution as well.
Supply chain finance, at its core, allows for suppliers to get their money more quickly than with a normal payment process. On the flip side, you’re able to maximize Days Payables Outstanding (DPO) at the same time your suppliers get paid at the pace they want. This has all the hallmarks of a win-win for everyone involved, something still too uncommon in business today.
Tip 3: Implement a Supplier Portal
This tip is sort of related to our first one, but that doesn’t make it any less relevant. A communication plan doesn’t necessarily have to include a supplier portal, but it sure is a good idea. If you’re not aware of them, supplier portals are web-based systems that allow for easy checking of invoice status without calling or emailing the AP team to find out what’s going on.
This transparency allows for improved communication and collaboration with your suppliers. The Best-in-Class companies from our recent survey understand this truth, which is why more than half of them use a supplier portal (often backed by a business network) already. The entire purpose of a supplier portal is communication and collaboration; implementing one properly can help improve your supplier relationship significantly.
The Least You Should Know …
Top AP teams understand that they occupy a critical space in the supplier relationship. They’re also keen on managing the pieces of the relationship they can, which is why keeping the lines of communication open with their suppliers so critical. Top AP organizations do everything in their power to maintain their part of the supplier relationship, which in the long run helps everyone.
Interested in more detail about the state of ePayables? Check out the Ardent Partners report “ePayables 2014: The Quest,” available free with registration from Ariba, Taulia, and Tradeshift (and directly from Basware).
