Vendor-client business relationships are critical. If a client needs something from a vendor, they want to have a strong relationship with them. If vendors remain impersonal, a client might feel undervalued, and they may decide to go elsewhere to spend their money.
Vendors need clients and vice versa. Each one can’t exist without the other, and if businesses don’t succeed, there’s a particular product or service lack that hurts the general public.
In this article, we’re going to talk about AP automation, one of the most useful tools a client-vendor relationship has. In the end, you’ll likely want to look into purchasing AP automation software if you have not done so already.
What Exactly is AP Automation Software?
Before we give some reasons why AP automation software is so useful, we’ll explain what it is so you’ll know precisely what we mean. AP stands for accounts payable, one of the most critical business areas. You probably know all about your accounts payable department and what it does.
AP automation software:
- Is a way to automate lots of the everyday, time-consuming AP tasks
- Can save your employees a tremendous amount of time and your company a great deal of money
Your company presumably only has the budget to hire a certain number of individuals to work in the AP department. If they have to continually worry about paper invoices rather than processing them through an automated system, that’s going to monopolize their time.
Beyond that, you have to pay these employees, and if you don’t automate your AP tasks, your workers will have to put in additional hours. Once you automate, you save the money you’d have to pay them for overtime.
Now that you know a bit about AP automation software, let’s review some ways it can help out with vendor-client relationships.
You Can Use It to Strengthen Fraud Controls
As a business, fraud can cost you money wherever it appears. You must have safeguards in place to fight it at every level.
You would hope that as a business, you have honest clients that would never try to deceive you about anything. However, some companies:
- Might attempt fraudulent practices if they think they can get away with it
- Can take advantage of outdated paper invoice payment systems to try and scam you
It’s easier to perpetrate fraud with paper invoices that a client can forge. These invoices can also disappear at inopportune moments.
If you automate your AP department, fraud becomes almost impossible. If a client ever disputes an invoice, you can quickly go to your automated system and pull up their account. You can easily access every transaction involving that client in which your business has ever engaged.
Again, you want to think the best of your clients, but if any of them do try to pull a fast one, automation is your greatest weapon to combat that.
This Helps Error-Prone Vendors
Maybe you’re a vendor, and you keep running into account payable issues. Perhaps it’s because of an inefficient, outdated paper invoice system, or employee incompetence could be to blame.
If you automate, it’s more than likely that it will eliminate these problems. Suppose your customers were becoming frustrated because of these issues.
In that case, automation should clean up the department so the clients don’t move on to another vendor with a tighter rein on their company’s accounts payable.
Companies Can Negotiate More Early Payment Discounts
Many companies like to offer their clients early payment discounts. These lower prices make it more probable that a client will stick with them for the long-term.
However, if a company does not automate their accounts payable department, they can keep having problems in this area, and it can be a constant distraction. They can’t offer discounts if they have to keep finding lost invoices all the time, and the numbers never add up.
Let’s say a company has automated the accounts payable department, and it’s running smoothly. They can then offer their clients more discounted early payment options and develop some other methods that will encourage client loyalty over time.
Reporting and Analytics Ease
Perhaps the most compelling reason that accounts payable automation helps customer and vendor relationships is that the vendor can look at this department and crunch the numbers much more effectively once it’s in place.
They can see which customers pay fastest and which ones always have accounts that are in arrears. They can develop more advanced sales strategies that can benefit customers like never before.
Confusion is an accounts payable department’s most formidable enemy. With the advanced analytics suite that the typical accounts payable automation software provides, a company can determine which services they should discontinue because they aren’t selling.
They can reduce the number of services or products they offer, allowing them to dominate their niche. It is in this way that both the vendor and their clients can grow together.
Accounts payable is far from the only business area that can utilize automation. Accounts receivable, social media, the company blog, an email newsletter, and many other areas can also benefit from it.
The more ways a company can automate, the more money they can save, and the more they can expand. They can offer their clients more discounts and develop better relationships with them.
A company should find the enhanced analytics and data that automation provides in various areas to be extremely valuable. They don’t need to set up focus groups or other time-consuming efforts if they keep an eye on their analytics.
If they don’t automate, other companies get ahead, and their client relationships falter. Automation has revolutionized entire industries over the decades, and some of the latest software versions are borderline miraculous with what they can accomplish.
If you’re a client and your vendor has not automated their accounts payable department, you might want to consider going elsewhere. Their unwillingness to cave on this issue means they’re probably not the best fit for you.