To say that the COVID-19 pandemic had a drastic impact on supply chains around the world would be an understatement. During the fourth quarter of 2021, 61% of small businesses indicated that they faced supply chain disruptions, according to the U.S. Chamber of Commerce. To keep operations humming along, 63% of organizations had to change their supply chains in some way.
In addition to building more resiliency into their supply chains and diversifying sources with new partners, many businesses have used the pandemic as an opportunity to improve their accounts payable (AP) departments by investing in AP automation solutions.
If there’s one thing managers learned during the pandemic, it’s that the need for automation in AP is more important than ever. After all, we’ve all witnessed huge AP slowdowns with offices being shut down, chasing paper invoices, finding people to approve a payment, and seeing increased invoice fraud.
Unfortunately, you can’t just decide to automate AP and think everything will work out swimmingly. As you begin evaluating your options for AP automation, it’s important to provide a good experience to your suppliers. The better experience you’re able to deliver, the more likely they will embrace the new electronic invoicing process.
With that in mind, let’s examine a few things to consider as you begin thinking about bringing more efficiency to your invoicing process.
Give suppliers visibility and efficiency
While you can’t force suppliers to change the way they invoice and get paid, you can reward them with an improved experience.
Leading AP automation solutions give suppliers clear visibility into the status of every invoice as it moves to payment. Not only will they be able to determine the status of invoices at a glance, but they can also instantly self-serve the information 24/7 without having to get help from your AP personnel.
Additionally, AP automation dramatically shortens the invoice to pay cycle time and thus gives organizations the ability to take early payment discounts whenever desired. For suppliers, this means customers will be more likely to pay sooner to improve their profit margins.
As is the case with anything, when there’s change, there can be resistance. As you upgrade your AP processes with automation, some suppliers might be slower to embrace it. By offering a process that is more efficient and adds more value to the supplier relationship, you can entice suppliers to transition faster.
Look for solutions that require little manual intervention
If your AP automation solution requires suppliers to perform a lot of manual tasks or invest significant IT resources to administer and manage, that’s likely going to be a deterrent when it comes to adoption rates.
What’s more, if you’re forcing suppliers into a new resource-intensive system, you’re potentially damaging a supplier relationship. In today’s challenging business landscape, that damage could cause a devastating impact on your operations should the supplier determine they’ve had enough and no longer prefer to do business with you.
The right AP automation solution will help you avoid this issue. As you begin searching for a solution, look for a platform that is delivered via the cloud as a software-as-a-service solution. Best-in-class AP automation tools are intuitively designed and easy to use for both you and your suppliers.
Don’t make suppliers spend a single penny
As you narrow down your AP automation options, make sure you pick a partner that lets your suppliers adapt to the new process without spending any money. Not only should they get paid in full on each invoice (versus being charged a fee, however small it might be), but they should also be able to leverage their existing billing system.
For the best results, make sure the new invoice process will require no manual data entry. While you’re at it, look for a solution that enables suppliers to leverage the existing document format they use to send invoices; expect pushback if they’re required to significantly alter what they need to do to get paid.
Find a proven partner
At the end of the day, everyone is in business to make money. If a business is supplying you with products and materials and you’re not paying them promptly for whatever reason, it’s only a matter of time before they hit you with a credit hold— or decide to stop working with you altogether.
For this reason, it’s critical to look for a partner that has years of experience in the AP automation space. Not only do leading providers have proven technology, but they are also aware of best practices that can streamline the invoicing process end to end.
Improve supplier relationships with AP automation
When you make any changes to your processes, it’s not uncommon for suppliers to evaluate what’s in it for them. They’re used to doing things one way, and you’re telling them to do things a different way.
If your goal is to improve supplier relationships, you need to give your partners an easy path to opt into the new process. With the right AP automation solution in place, the choice to embrace the digital approach to invoicing will be a clear one.