How to facilitate prompt payments by fostering stronger supplier relationships

Finance departments have a powerful opportunity to help organizations remedy one of their most pressing concerns — late payments. 

According to a QuickBooks survey, 73% of businesses are negatively impacted by overdue invoices from customers, partners and other third parties. Chasing payments is more than an inconvenience; it drains time and resources that could be better spent on important tasks such as upskilling and strategy setting and can negatively impact important buyer-supplier relationships. Late payments also affect suppliers’ abilities to pay their bills, jeopardizing their business and inhibiting their ability to invest in new opportunities for growth.

There are a myriad of factors that can influence why organizations are unable to execute timely payments, including inefficient invoice and payment processes — think lengthy approval chains and dependence on paper invoices and checks — as well as a higher cost of doing business. Finance teams will need to build stronger supplier relationships to help get to the root cause of payment delays and tee up a lucrative new year. Let’s look at how technology can help. 

Leverage technology to strengthen supplier relationships

As businesses plan for the year and look to solidify important relationships and ensure prompt payments, anticipating their suppliers’ evolving needs and expectations is critical. In fact, according to Salesforce Research’s State of the Connected Customer report, “customer expectations and behaviors have shifted radically, rapidly and permanently” since the pandemic, and 76% of B2B companies expect the companies they do business with to know their unique needs and expectations. 

Innovation can help finance teams reduce time-consuming manual paperwork, so they have more time to dedicate to relationships. Technology also enables teams to align with their suppliers’ preferences and provide better, more customized experiences and to facilitate more convenient payments.

Catch outstanding payments and errors

Accounting departments that are still dealing with manual, paper-based processes for invoicing and payments often lack visibility into their financial transactions. According to Deloitte research, that limited visibility is one of the most pressing pain points for middle-market B2B companies, taking a toll on important relationships and often leading to extra costs and delays. 

Automated financial solutions can alleviate the pain by bringing transparency to these mission critical processes and can help finance professionals stay on top of invoice and payment processes. Via API integrations with the accounting systems, the solutions can help reduce the amount of paper and secure invoice and payment data in a cloud-based platform so it’s readily available. They also often provide for better reconciliation with succinct remittance data for both new and historical payments and real-time visibility into status.

The solutions can also boost supplier relationships by eliminating the time-consuming hassle of making follow-up calls for payment statuses. Instead, these solutions offer email notifications that alert suppliers to status updates, such as when an invoice is approved or payment is complete, enabling them to effectively monitor their cash flow without chasing updates. 

Consider e-payment offerings

Another important way technology can enhance buyer-supplier relationships and facilitate payments is by providing faster, more convenient, and secure payment options, including e-payments. 

Modernizing payment options and empowering suppliers to choose an option that aligns with their needs, whether it’s Real-Time Payments, Automated Clearing House, credit cards or other e-payment methods, is a win-win for both parties. With e-payments, funds are available to the recipient far faster than with slow-moving paper checks, and businesses benefit by accelerating cash flow and reducing the administrative burden of collecting and reconciling payments.  

Renewed commitment to partnerships

In the fourth quarter of 2023, 80% of finance leaders surveyed for Deloitte’s quarterly CFO Signals report said they expect their companies to embed more automation and digital technologies into their operations, and 76% expect digital transformation and technologies to play a greater role in achieving their companies’ strategy. 

Undoubtedly, investing in innovation can help finance teams make better use of their time, increase their visibility, and facilitate more timely payments. Just as importantly, it can help to strengthen the partnerships their business depends on, illustrating a willingness to adapt to changing needs and expectations and a commitment to delivering a superior experience.