Optimizing Software-Driven AP Vendor Relationships

When it comes to accounts payable automation software, finance executives must investigate the efficacy of available options from both technical and business perspectives. Optimizing vendor relationships can have a direct and immediate impact upon operational performance and standing in the industry, resulting in improved service, higher efficiency and cost savings for the organization.

Software for accounts payable automation can improve coordinating workflows, expediting payments and reducing time spent managing vendor data. Centralizing vendor information is a key aspect of this process, delivering greater transparency and enabling real-time updates on contractual terms and negotiated payment terms. Automated invoice matching, with real-time collaboration between accounts payable, auditor and vendor can further improve vendor relationship management (VRM).

Using software to collect data and creating a continually updated record of transactions allows executives to assess terms of suppliers and vendors, benchmark performance and improve visibility and transparency into the accounts payable process. Performance metrics such as vendor financials, credit ratings and delivery track records provide a basis for making informed decisions when it comes to vendor selection..

C-Suite executives should seek a software platform that facilitates and integrates with multiple AP processes, creating a 360 degree view of the company’s financial position. The software should provide automatic invoice coding and electronic payments, streamlining the payment process by automatically populating the accounts payable database. This ensures compliance with the company’s policies, and with international laws and regulations. Advanced analytics capabilities should allow for exploring the vendor purchasing history and utilization of payment instruments, as well as providing exceptions-based reporting to reduce risk.

This facilitates collaboration between finance and procure-to-pay (P2P) departments, as data can be easily shared across the system and integrated with existing internal and external accounts payable processes. A single view of suppliers, vendor analytics and workflow approvals can drive increased efficiency and ensure that supplier discounts for early payments are enabled. One way to improve VRM is through the use of dynamic discounting personnel, which allows a company to pay their invoices early, on terms most advantageous to them.

To summarize, accounts payable automation software can dramatically improve operational performance when it comes to managing AP vendor relationships. C-Suite executives should be focusing on software that provides cloud-hosted features such as automated invoice coding and payments, dynamic discounting personnel, and advanced analytics capabilities. By optimizing processes, executives can ensure that their company is positioned to realize the cost savings, efficiency and compliance benefits associated with VRM.