Selecting the Best AP Automation Solution:
Don’t forget about vendor management
Congratulations! You’ve started your journey to find the perfect accounts payable automation solution for your high-growth company. We’ve discussed previously how to put together your iron-clad list of “must-have” features. One thing, or rather one group, to consider while meeting with solution providers, is your vendors.
Your vendors and suppliers are the reason you operate accounts payables. They will also be the keystone to the success of your AP automation software.
Whichever software solution you ultimately decide to run with should have solid vendor management functionality. For you to decide if that method is adequate for your vendors specifically, you need to ensure you fully understand the daily, weekly, and monthly interactions your AP team have with them.
This post outlines the benefits of taking the time to consider your vendors while selecting your AP automation solution, ways you can start to understand the needs of your vendors, and how to figure out what solutions could potentially make their lives easier (and, thus, yours).
Why considering your vendors’ needs is beneficial to you
Taking care of your internal needs when it comes to accounts payable automation is obviously your primary focus. However, taking care of your vendors’ needs should be high on your priority list.
This may seem non-intuitive, but take this into consideration: happy vendors are more likely to respond to you.
We have found that when vendors are given access to tools and information they need to be active participants in your spend management and accounts payable efforts, they are more likely to give you the information you need to speedily process a period close.
In short, this means you get more and better data around your spend faster all while getting solid vendor management.
Additionally, taking into consideration the needs of your vendors can save your AP team time fielding repetitive support inquiries. For example, exposing the status of a payment against one of their invoices in a dedicated vendor portal will prevent your supplier from emailing your staff. They will be able to self-serve. Another example benefit is if the dedicated portal allows them to manage their own banking, contact, and tax information, your AP staff will no longer need to hunt that information down via email.
Not having to address these questions from your vendors means you AP clerks can focus on other, higher-level tasks.
Now that we’ve cleared up why you should consider your vendors when selecting an AP automation solution, let’s move into how to properly do so.
Walk a mile in their shoes
NThere is a pretty good chance that you have your own in-house accounts receivable team. You should leverage them to figure out what their common pain points are working with customers.
Some common vendor pain points we’ve heard here at Accrualify include:
- Lack of transparency when it comes to PO balances
- Misunderstanding of payment terms
- Not enough feedback on invoice submission or payment remittances
- Slow response times to basic inquiries
Another good source for information regarding common inquiries from your vendors specifically is directly from your AP team. Be sure to ask them what the most common inquiries they receive are. They are generally fielding vendor questions, so they can tell you where the transparency gaps are for your vendors.
Once you have a pretty solid idea of where you can improve communication and transparency of information with your vendors, you can then ask your solution providers’ sales representatives how their software addresses the needs of your vendors.
Ways to address the needs of your vendors
Now that you have a pretty good idea of where you can help your vendors, it’s time to translate those pain points into possible solutions.
First, make sure any solution you consider offers a vendor portal. There are a number of solutions out there that just have you manually load your vendor bills and/or have your vendors email their invoices to an alias that then loads them into the system. This solution doesn’t allow your vendors anywhere to go to manage themselves, putting full onus on your staff.
Once you’ve established which solutions you are considering offer a vendor portal, take into consideration how robust it is. Is it just a place for your vendors to upload invoices and see past invoices they have submitted? This might be enough if you don’t have a lot of vendors that you work with or, by some miracle, they don’t tend to ask much of your AP staff.
Some vendor management portals will allow you to give access to anything pertinent to your vendors. Take stock of what data is exposed to your vendors and be critical of whether or not that data is enough to help your vendors self-serve for their most common inquiries.
If that isn’t enough, top-tier vendor portals will not just expose pertinent data to your vendors, but will also provide some baseline analytics around their interactions and transactions with your staff. They may offer communication tools, contract and document management, or more. There’s a varying degree at this level of the amount of features you will be offered, and it’s up to you to decide what satisfies your vendors’ pain points and fully addresses your own.
Ultimately, if you are unsure of how a solution can help address some of your vendors’ issues, don’t hesitate to ask the rep you are working with.
While meeting the needs of your vendors when choosing an AP automation solution shouldn’t be your highest priority, it should merit consideration. Ultimately, solving some key pain points your vendors experience while interacting with your AP team will only help your team be more efficient and make them more likely to get vendor participation, bumping up response rates.
Decide which common issues your vendors encounter that you are willing to address, and ensure your automation solution offers the tools to help address them. The benefits of doing so will far outweigh the costs.
In our next post, we will go over how to root out the gaps in your data and how to find an AP automation solution that helps you fill those gaps.