Vendor relationships matter now more than ever. After months of trying to stabilize cash flow and collect from customers in order to pay your own vendors, lockdowns are ending and things might finally be looking up. But you’re not out of the woods just yet. You’ve just spent months trying to work with your suppliers’ collections departments, and relations might still be a bit tense at the moment.
As things begin to pivot back to normal, it’s in your best interest to reestablish your reputation. Therefore, it pays to look at how you are working to establish relationships with new vendors, reinvigorate and reinforce existing ones, and use this to gain a competitive edge. Today, we look to explore what goes into this and discuss why a solid procure-to-pay process will put you in a position for success.
Making the Pivot from Survival to Resilience Starts with Vendor Relationships
The past six or so months have presented us all with challenges. Money has been hard to come by—and no matter how much your customers want to pay you, if they can’t do business, they can’t pay you. Unfortunately, for many distributors, if your customers were having trouble paying you, you probably faced challenges paying suppliers.
Back to Normal: Paying the Backlog
According to a recent article, lockdowns have caused a lot of strife and resulted in strained relationships between suppliers and customers.
Highlighting recent findings from Atradius, companies are spending more time trying to chase down late invoices, seeing increases in late payments, and as a result are having problems trying to pay their own suppliers.
But things are getting back to normal. Your customers’ businesses are opening. Outstanding AR is dropping—and you’re able to take this cash and get to work on your AP backlog.
Rebuild and Reinvigorate
Things are normalizing, yes, but there are ways to come out of this stronger, more strategic, and more resilient—and it all starts with the actions you take on the road to recovery. From technological innovation to treating your suppliers as partners who make your business better, you can establish yourself as a reliable and engaged customer who wants to add value to their business in the same way they provide value to yours.
How Technology Plays a Part: Reduce Risk, Improve Compliance, Increase Speed
Though much of the supplier relationship relies on your ability to go on a charm offensive—connecting with the companies you trust and reiterating your commitment to the relationship you’ve sought to build, the reality is that words only go so far. Technology helps you to deliver on the promises.
For distributors, whose supplier relationships are tightly intertwined with margins and availability, the right technology can put you in a position to deliver. Here are just some of the ways technology improves the procurement process and encourages closer supplier relationships.
Reduce Risk: Set, Monitor, and Deliver on Expectations
The lockdowns exposed you to risk. They exposed your suppliers to risk. Even if you’re going on a charm offensive, late payments still show up on the report as such. A key part of building a partnership with your suppliers is to find mutual ground with both sides setting expectations for the other and delivering on them.
Just as you expect a supplier to provide you with on-time, accurate deliveries and transparent pricing, they expect you to provide similar accuracy. Purchase and procurement management can put you in control of both sides, allowing you to track supplier timeliness and accuracy while staying ahead of payments and fulfilling your side of the partnership.
Improve Compliance: Take Control of Spend and Reduce Barriers
Compliance takes form in a variety of ways. Accurate payments and reduced exceptions can help you to undo some of the annoyance caused by paper checks. Supplier portals will help to provide your vendors with transparency and accuracy, and better payment processes will ultimately show your commitment to the relationship.
By centralizing your procurement and purchasing processes, you can ensure a steady supply of materials while enforcing policy and process controls.
Increase Speed: Automate and Reinforce
When it comes to speed, automation can help you receive rebates and discounts. But those are just part of the equation. Automation means less human input. Less human input reinforces your commitment to accuracy and control by minimizing the chance that human error comes into play.
Automation will reduce costs on your own end as well. Not only do you reduce human error—you reduce human costs involved with entering the data.
Acumatica: Procurement Simplification and So Much More
Running a distribution business is all about speed, cost management, and the ability to deliver. Whether you need to improve supplier relationships, increase margins, or reduce warehouse challenges, Acumatica is built to deliver.
With Acumatica, you don’t just get procurement, you gain total control of your business. Connecting the entirety of a distribution firm’s needs—including procurement, warehouse management, sales, and finance, you can empower end users to do more for the business.
Acumatica Distribution Edition includes Sales Order Management, Advanced Inventory, Requisition Management, Purchase Order Management, Warehouse Management, and Advanced Financials, and enables distributors to manage the entire sales cycle at the office or on the go.
As a leading provider of Acumatica Distribution Management, the Cloud 9 ERO Solutions team has helped businesses just like yours to make the most of their journey to better, stronger, and faster ERP. Don’t believe us? Take a look at our case studies to learn more. Ready to know the true power of Cloud-built distribution ERP? Get in contact with the Cloud 9 ERP team today.
Check out our Acumatica Distribution Demo to learn more.
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