ePayments Mean Better Vendor Relationships
Posted in General by Regal Software
The phrase is so commonplace that it is nearly a stereotype: “The check is in the mail.” Time and again, accounts receivable staffers have heard this excuse. Sometimes, it’s even the truth. And if a check is lost in the mail or was mailed prior to a federal holiday and delivery is delayed, it can result in a company being placed on credit hold. Credit holds interrupt the delivery of parts, raw materials and services that are critical inputs to the final product. A credit hold can shut down production or cause a missed delivery deadline. Maintaining the good will of vendors and ensuring the flow of critical components and services is one major benefit of automating the accounts payable process.
Accounts payable automation that includes effortless and just-in-time electronic payments builds a stronger and more transparent relationship between a business and its vendors. An automated electronic payment method creates consistency and presents the business as a dependable payor. Accounts receivable personnel are less inclined to plague the AP department with collection calls if an invoice is missed. Instead, they will work with the business to resolve the problem. Credit holds are minimized, as an automated system can be programmed to issue advance notice of a pending remittance. The vendor knows the payment is on the way, and is more likely to release a shipment even if the credit limit has been exceeded.
Small businesses that are thinly staffed benefit tremendously from accounts payable automation. Because automatic payments can be scheduled ahead, there are no dramatic interruptions in the AP process if the sole accounting staffer takes a much-needed vacation. He or she merely has to postdate a payment run prior to departure. The software transmits the payment information to the bank with the release date encoded. Payment then goes out on time. Vacations are headache-free, vendors are happy, and there is no last-minute scrambling on the part of fill-in personnel to try and figure out how to write a check to a supplier.
Automating accounts payable benefits the company not only with its ability to reduce overhead costs, but also in its ability to strengthen the company’s relationships with its supply chain. Accounts payable automation becomes a win-win situation for everyone involved.
RegalPay® can automate the accounts payable department of small or large businesses using existing enterprise software. Contact us for more information or to schedule a meeting with our software professionals.