How Automatic Bill Pay Improves Your Vendor Relationships
by Maddy Osman
According to the Institute of Finance and Management (IOFM) Benchmark survey, more than two-thirds of Accounts Payable (AP) teams report surges in invoice volume in 2021.
And it doesn’t appear to be slowing down.
If your team is struggling to keep up with the increase in invoice volume, late payments will become inevitable, ultimately taking a toll on your vendor relationships and making it harder to become a customer of choice.
So, what’s the best way to handle increasing AP workloads?
Nearly half of the teams surveyed by IOFM (46%) shared that they simply worked longer hours to handle the increased workload, while only 26% leveraged automation.
However, whether you’re a small business or a large institution, AP automation offers more benefits than just reducing your team’s workload. With features like automatic bill payment, you can improve vendor relationships, streamline accounting tasks, and decrease AP costs.
Keep reading to learn about:
- How AP Processes Affect Vendor Relationships
- Paying Bills Online vs. Mail
- How Automatic Bill Payment Works
- Benefits of Payment Automation
- Introducing Plate IQ VendorPay
- Tips To Make VendorPay Work for You
- Final Thoughts: Improving Vendor Relationships With Automatic Bill Payment
How AP Processes Affect Vendor Relationships
Achieving customer of choice status can transform your vendor relationships into a strategic advantage. Gallup found that 45% of suppliers are more likely to “go the extra mile” for customers that keep them engaged.
When you’re a preferred customer, your vendors are also more likely to give you top priority on supply chain issues, take risks for you (such as extending a line of credit), and offer reduced costs.
But, if your AP processes aren’t up to par, you’ll have a hard time developing strategic vendor relationships.
Gallup lists clarity, simplicity, and integrity as three of the top factors that influence how your supplier sees you. In short, the foundation of a good vendor relationship starts with making it easy to do business with you.
Did you know that Plate IQ’s VendorPay platform lets you pay your vendor using their preferred method? Our White Glove service can handle any form of payment preference!
Preferred customers communicate well, pay bills on time, and use each vendor’s preferred payment method. Investing in AP automation and automatic bill payment doesn’t just make your team more accurate and efficient. It turns you into the type of business that suppliers and vendors love.
Paying Bills Online vs. Mail
Paying bills by mail leaves you vulnerable to a host of potential problems, including late payments, late fees, and security threats. By switching to online bill pay, you reduce your spend on postage and late fees and secure your business’s financial information.
You can improve your AP processes even further by automating bill payments to ensure on-time payments and improve efficiency. Businesses that implement payment automation see up to a 30% reduction in their cost per invoice.
How Automatic Bill Payment Works
Automatic bill payment is the use of software to schedule online recurring payments to your suppliers.
With automatic bill payment, you can choose to use ACH, bank transfers, or credit cards to make online payments. Providers like Plate IQ can also send checks for you if you or your vendor prefer.
AP processing includes three primary steps:
- Invoice capture
- Invoice approval
- Bill payment
With payment automation software, you can also automate invoice capture and approval. And you can use software to capture spending data and match purchase order data to invoices.
Benefits of Payment Automation
Autopay solutions don’t just make life easier for your AP team. Here’s a look at how payment automation impacts your entire business.
Guaranteed On-Time Payments
When you mail your vendors a check, you can’t guarantee on-time arrival. Setting up a scheduled payment ensures your payments arrive on time and helps you build a positive payment history with your suppliers.
You can also keep vendors informed by automatically sending them payment notifications. With a scheduled one-time payment or monthly payments on Plate IQ, your vendors can see upcoming transfers and know exactly when to expect payment from you.
Reduced Costs – Don’t pay a fee to pay your invoice!
Using automated online bill payment eliminates the need to spend cash on postage and can help you avoid late fees.
In some cases, using automated payments can even help you take advantage of early payment discounts when you beat the due date. According to a report by the IOFM, most companies only capture 21% of available early payment discounts. In comparison, top-performing AP departments capture 80% of these early payment discount offers.
Relying on paper bills and mailing checks can be an organizational nightmare. With digital invoices and automatic payments, your AP team can easily organize invoices and use features like automatic approval routing to save even more time.
With features like Plate IQ invoice automation, your AP team can spend 80% less time on invoices. Not only that, but you can integrate with your accounting software so all invoice and payment information is automatically synced and updated there too.
Manual data entry opens up your AP process to human error, such as wrong payment amounts on checks or inaccurate invoice data capture. Automating monthly bill pay improves payment accuracy and increases the quality of your spending data.
Ability To Track Spending
Tracking your spending over time is a hassle if you rely solely on paper invoices. Payment automation software that captures invoice data can provide insights into your spending and help you identify opportunities to reduce expenses.
Plate IQ also includes automatic GL coding so you can accurately track your spending based on category or vendor with ease.
Sending your bank account information or credit card number through the mail can increase the risk of identity theft. Payment automation eliminates the need for paper checks by using digitally routed payments that are easier to secure and track.
Introducing Plate IQ VendorPay
Plate IQ’s VendorPay network lets you pay more than 180,000 vendors directly from the Plate IQ AP platform and earn cashback via secure, digital payments. In addition to automatic bill pay, VendorPay offers invoice digitization, approval routing, and payment methods customized to each vertical.
In-network vendors use VendorPay to track your payment statuses, increasing clarity and communication.
Tips To Make VendorPay Work for You
Follow these top VendorPay tips to save time, secure your payments, and customize your payments to match vendor preferences.
Use Automatic Approval Routing
With Plate IQ, you can build custom payment approval rules that get your invoices to the right person every time. Managers can approve invoices with ease, and if team members have any questions, they can communicate right on the desktop or via the mobile app.
Customize Payment Methods
Not all vendors have embraced online bill payment yet. With Plate IQ, you can customize your payment method based on the vendor. We’ll even send checks for you. Once your payment goes through, we automatically notify the vendor in their portal, no matter the payment method.
Select In-Network Vendors
Plate IQ’s VendorPay network includes more than 180,000 suppliers that accept direct payments. By choosing in-network vendors, you can receive cashback bonuses on your expenses and earn early payment discounts.
Improve Security With Virtual Cards
When you mail your checking account number or credit card information, you’re leaving your business’s security to chance. Improve financial security by using a virtual debit card (or virtual credit card) to pay your vendors. With virtual cards, you can create a new card for each vendor or service provider and set up spending limits to protect your money.
Final Thoughts: Improving Vendor Relationships With Automatic Bill Payment
Whether we like to admit it or not, we all have our favorite customers, and that’s true for your vendors too. When you’re a customer of choice with vendors, you unlock access to the highest quality ingredients and receive customer service that goes above and beyond.
Building strategic supplier relationships starts with having your AP process in order. If you meet your payment date on a regular basis and use your vendor’s preferred payment method, you’re well on your way to becoming a favorite.
Learn more about Plate IQ’s VendorPay Network to discover all the ways AP automation works for your vendors and your business.
Maddy Osman is a writer and entrepreneur who writes about B2B technology at The Blogsmith, a research and content agency. To learn more, visit TheBlogsmith.com.
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