An organized system to manage supplier payments is essential to maintaining healthy relationships with vendors and partners. This can be challenging without a digital solution, especially if your company is in growth mode. You might face common obstacles like late payments, disorganized billing, and excessive paperwork—but fortunately there are plenty of ways to solve them.
Why you should streamline your supplier payments
Efficiency and accuracy are important in maintaining good supplier partnerships. Disruptions in the bill paying process due to inaccuracies or human error strain those relationships. Streamlining supplier payments with easy-to-use tools eliminates those stress points, leading to potentially better payment terms and more effective service for your customers.
3 challenges of supplier payments and how to solve them
The three most common problems that small businesses have with supplier payments are all based on accuracy and efficiency. These issues are compounded when you use a manual bill paying process. The extra paperwork, the human factor, and the likelihood of redundancies are all contributors to this challenge. Here are the most common ways that manifests itself.
Problem #1: You’re sick of doing paperwork for slow payments
Your payee’s bank may require several days to process a check. It can take even more time for that cleared check to show up on a bank statement. Add that to the hours it takes to manually create invoices and the risk of human error. Your accounting department (or you personally) ends up spending far too much time doing paperwork and correcting mistakes.
Solution: Use online payment tools
Using an online payment platform that switches your paper check system over to ACH, credit card, or wire transfers makes your payment system more secure and gives you better tracking tools to organize supplier payments. It’s faster, more efficient, reduces paperwork significantly, and gives your company greater control over the payments process.
Suppliers prefer check payments? Easily send paper checks through Bluevine’s online bill pay platform.
Problem #2: Keeping track of suppliers and payments feels too disorganized
Decentralized payment systems that employ either paper records or multiple digital platforms are inefficient and often inaccurate for accounting purposes. Supplier payments are deductible expenses that are subject to audit from tax regulators. A disorganized record-keeping system can create financial and legal problems for your business.
Solution: Keep all your bills in one place
A centralized billing system that includes data analytics makes it easier to manage accounts payable, plus it’s more secure. As your company grows, it’s important to minimize complexity, particularly in the accounting department. Digital payment tools can categorize expenses for tax filings, connect to accounting software, and provide spending analytics in real time.
Problem #3: Your payments process feels like too much busywork
Overcomplicated payment processes are often seen in companies that have gone through or are going through a growth cycle. There’s a point in time when it just feels like there’s too much busywork. This is more apparent when doing manual data entry and bill management, whether you’re using paper or not utilizing a digital platform’s automation features.
Solution: Automate what you can
Digital payment solutions usually allow you to automate payments to vendors and suppliers. This includes scheduling days and times for payments to go out, setting up recurring payments, processing batches of invoices simultaneously, and creating approvals systems. Using these features can reduce busy work and make your company more efficient.