How Ineffective AP Process Can Affect Supplier Relationship


An ineffective AP process has a lot of effects in a company. This includes the relationship that the company has with their suppliers. If you don’t use AP software or you’re still using archaic methods in processing your accounts payable, some of the most common things that you’re going to experience will include:

Late payments

Inaccurate balance sheets

Inefficient management of company budget

These three things can have heavy effects on how you sustain the working relationship that you have with your suppliers or vendors. A company that can’t pay on time or has the wrong information that their partners ask them of will get a bad reputation over time. This reputation could cause less and less companies being willing to make business with them.

More Errors Mean More Broken Flows

The workflow of your company is something that should be prioritized. It’s paramount that you have an efficient workflow which includes the processing of your finances. You should utilize an AP software to ensure that everything involving numbers and vendor data are processed in an accurate manner. Not doing so could net you inaccurate analytics.

When you have wrong analytics on your hands, you’re not going to be able to make the correct judgment needed. If you think that the money that you spent on your labor is more than the money that you spent on your products, you might think that you need to reduce the workforce that your company requires.

Imagine that you made this wrong decision due to incorrect data. Not only will you be losing employees in the process, you’re also losing capable hands that can help you when the time to expand comes. Automation is one thing that an accounts payable software does best. You will have access to the data that you’ve collected without having to wait for manual entry or printing.

Making the Wrong Moves Lead to Sour Relationships

A company that’s on top of its industry is there because they’re capable of making the correct strategic moves whenever they have to. Since they have access to accurate data, they’re able to do it confidently and are able to inform their vendors of any changes that they have to make in order to make everything flow seamlessly.

If you don’t have the confidence in what you’re doing next, you might not be willing to tell your suppliers about what you’re planning in the next quarter. Not doing so is a big red flag for the opposite party. When a supplier is left out in the dark, they can’t make the necessary adjustments needed to ensure that there are no wrong details with your and their assets.

When you aren’t able to inform your vendors about the changes that are necessary to be made, you risk them experiencing backlash. Let’s say that you have a chain of restaurants. Your archaic methods with accounts payable led you to believe that you had to cut your burger patty budget in half. When you do this so suddenly, your suppliers will be extremely upset.
Improve supplier relationship using Nexus Systems AP software. Let us show you how it will work for you, contact us today!