Optimize Vendor Relationships with AP Automation

LearnMay 28, 20244 min read
Caroline Lu, Product Marketing Manager

In the competitive world of inventory led-businesses like e-commerce and consumer packaged goods (CPG), your success often hinges on your relationships with your suppliers and vendors. These partnerships go beyond providing goods and services; they offer solutions, share innovations, and contribute to cost-saving measures. In fact, they form the backbone of a resilient supply chain tailored to your business needs.

Effectively managing these relationships, known as Vendor Relationship Management (VRM), can set your business apart from the competition. Whether you’re in the process of creating a VRM strategy or looking to enhance an existing one, incorporating some best practices with the help of AP automation can make a significant difference in your business.

Challenges in Vendor Relationships for Inventory-Led Businesses

Building and maintaining strong vendor relationships is challenging and not always straightforward.

Managing accounts payable in vendor relationships can present several obstacles:

  • Payment Errors: Mistakes such as duplicate payments and overpayments can be costly to your business and create friction with suppliers.
  • Duplicate Invoices: Handling duplicate invoices (whether due to fraud or genuine errors) complicates tracking and management.
  • Fraud: Dealing with false invoices or inflated prices can lead to financial losses.
  • Manual Records: Relying on manual records is time-consuming and error-prone, leading to data discrepancies and potential issues.
  • Slow Processing: Manual processing of accounts payable is often sluggish and labor-intensive, requiring multiple approvals before payments can be made.
  • Missing Purchase Orders: Incomplete or missing purchase orders can disrupt the payment process.
  • Organizing Documents: Managing contracts, W-8/W-9 forms, and large volumes of invoices, which can delay processing and payments, impacting cash flow and cash management.
  • Onboarding New Vendors: Bringing new suppliers into the system can be a complex process, involving extensive communication and data entry. Inefficient onboarding can lead to delays and initial errors, setting a poor precedent for the vendor relationship.

Efficiently handling these tasks is crucial for fostering strong relationships with vendors.

Benefits of Vendor Relationship Management for Inventory-Led Businesses

Effective VRM offers numerous benefits, including:

  • Increased Trust: Building solid partnerships enables innovation, information sharing, and favorable pricing.
  • Greater Efficiency: Reliable suppliers ensure timely deliveries, increasing operational efficiency and reducing administrative overheads.
  • Improved Communication: Open communication helps manage disputes and collaborate efficiently.
  • Reduced Costs: Strong supplier and vendor relationships result in advantageous pricing, streamlined delivery schedules, and reduced indirect expenses.
  • Enhanced Company Reputation: Prioritizing relationships enhances your brand’s image and promotes positive industry connections.

Enhance Vendor Relationships with Settle’s AP Automation

Settle’s AP Automation solution not only reduces costs and boosts efficiency but also strengthens vendor relationships by providing:

  • Flexible, Secure Payment Choices: Enhance satisfaction and trust by paying suppliers and vendors how they want to be paid, from ACH to wire transfer, or even with paper checks.
  • Increased Vendor Collaboration and Visibility: With Settle Inbox, suppliers and vendors can send invoices straight to your unique Settle email address, eliminating the need to download and upload PDFs. They can also check payment statuses directly in Settle, saving you from more back-and-forth emails.
  • Faster Invoice Processing: Settle’s automated data entry simplifies invoice processing and minimizes errors. Suppliers and vendors appreciate timely payments and sometimes offer early payment discounts!
  • Automatic 3-Way Matching: Settle automatically flags discrepancies between your POs, bills, and receipts so you can resolve differences with your vendor faster and prevent under or overpayments with ease.
  • Seamless Integration: Effortlessly sync real-time data to keep your financial records accurate and ensure payments are made on time.

At Settle, we understand the importance of AP automation in enhancing your vendor relationships!

AP automation takes the hassle out of processing invoices, speeds up payment approvals, and ensures everything is accurate, which builds trust with your suppliers and vendors. This transparency and efficiency in handling payments paves the way for smoother collaboration, deeper connections, and ultimately, better business results!

Contact Settle today for a free demo and see how AP automation can elevate your supplier and vendor relationships while streamlining your accounts payable processes.

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