Improving vendor relationships with AP automation

AP Automation Best Practices Industry News
  • June 28, 2019
  • Chris Ogletree
Improving vendor relationships with AP automation

Improving Vendor Relationships with AP Automation

Successful businesses, whether large and small, understand the importance of cultivating positive vendor relationships built on trust. Stephen Covey once remarked, “In relationships, the little things are the big things.” Harmonious relationships in business, as in life, come from a balance of trust, strong communication, mutual respect, and a clear understanding of each other’s expectations.

By sharing your expectations, goals, and business mission up front, vendors can get a clear sense of who you are, what you need, and what you expect. You can also invite vendors to provide input on how they help you achieve your goals, thereby developing an enduring partnership. A good vendor will have unique insights into your industry and offer helpful feedback.

Conversely, when you take the time to understand your vendor and how they choose to operate, you’ll learn their payment terms, preferred communication methods, turnaround times, and the type of documentation they require. Additionally, a healthy relationship requires consistent effort, so keep your supplier updated on strategic company changes, new product launches, and operational shifts that may change expectations.

Though it’s not their primary role when it comes to vendor management, your accounts payable team plays a crucial part in helping maintain the ever-important relationship balance. AP departments handle the ins and outs of all vendor invoice processing as well as communication with vendors along the way. So efficient, well-organized, data-driven AP teams can set an organization up for success and help sustain healthy relationships.

Here are four ways AP Automation allows accounts payable departments to strengthen and improve vendor relationships throughout your organization.

Build trust with on-time payments

Many businesses rely heavily on their vendors to deliver their product or offering to the market. These companies can’t afford to lose their vendors due to accounts payable issues such as late or missed payments.

When the bulk of the invoices received by your organization are processed manually, it’s likely that your AP team is overwhelmed with inbound inquiries. Under this stress, invoices are often processed slowly and are easily lost. Department leaders get frustrated by slow payments and relationships with vendors can deteriorate as a result.

With a cloud-based solution in place, AP departments can dramatically increase productivity with fewer mistakes, positively impacting many areas inside and outside the organization. Staff can handle an increased volume of payables in half the time, process invoices faster, reduce manual data entry and coding errors, stay better organized, increase approval cycle times, and route payables automatically and instantaneously.

In turn, automation helps provide a better experience between businesses and vendors. Once an invoice is captured and validated, it is routed directly to the manager responsible for approving the payment accompanied with fully customizable workflows and notifications that help keep the invoice top of mind.

Vendors can take any concerns directly to the approver, and approvers can rest assured that invoices won’t get lost in the shuffle. Automation ensures vendors are paid on time based on the terms of their agreements and eliminates costly late payment fees. Vendors can also be automatically alerted during the invoice-to-pay process so that they know when to expect payment.

Prompt payment demonstrates appreciation for your vendors, respects agreed-upon conditions, and ensures your vendors see you as trustworthy. Vendors who get paid on time are also more likely to support special needs that may arise or provide future discount opportunities.


Rather than juggling a slew of messy email chains, automation transforms the accounts payable process into one centralized online workflow. AP Automation software automatically extracts data from invoices and routes it to approvers. Accounts payable teams instantly know where every invoice is, and controllers can monitor payments along with the productivity of their staff.

When vendors ask for invoice updates, everyone has access to real-time invoice statuses, making communications easy and transparent. Because invoice data is captured and logged in a historical database, managers and their teams can quickly and accurately answer vendor questions regarding past payments or settle a dispute within cost or timeframe.

Automation solutions can also provide vendor notification tools that make vendors aware of their outstanding invoice status. This means vendors don’t need to contact account managers manually to find out when their invoice will be processed, saving everyone significant time.

Better management, more respect

One of the best ways an organization can show respect for their vendors is ensuring they get paid on time. Slow or flawed internal processes, input and administrative errors, and invoice volume issues can put AP departments at risk of sending payments late. Late payments can disrupt cash flows and supply chains and are perceived as unprofessional and disrespectful.

Tracking hundreds, or even thousands, of vendors can be burdensome, especially when vendor information is scattered in many locations. AP Automation consolidates all vendor information into one digital database, making vendor relationships, information, payment history, and communication chains accessible to everyone. When vendors have a question, approvers and account managers can readily access this information, from anywhere.

With efficient, fast-moving automated accounts payable processes, vendors will be paid on-time, creating healthy relationships and securing a future supply chain.

Transparency and accountability

Any organization will face problems at some point with invoice processing or order deliveries. Working from an established relationship of trust and clear communication, companies can address issues with their vendors without finger-pointing or assigning blame.

Automation supports real-time reporting capabilities, allowing your AP team to understand where late payment fees are occurring and how to address those payment delays. AP data can provide actual spend numbers to budget holders which can be used to track against a cost center or project, as well as identify bottlenecks that are slowing vendor payments. Invoice data can also be used to reveal vendors working outside of company policies, such as those not applying contracted terms to their invoices.

In short, AP automation helps companies work more efficiently and transparently while ensuring vendors are held accountable to contracted agreements.

Vendors as Partners

Improving vendor relationships and building partnerships with them, rather than seeing them as necessary operational transactions, provides companies with a competitive advantage. A healthy relationship based on trust, communication, respect, transparency, and accountability means vendors will be more willing to go above and beyond should a situation demand increased supply or support. You’ll be able to ask for discounts when buying in bulk and vendors will be more willing to refer others to your company. With multiple benefits for you and for your vendors, everyone wins.

A Complete Guide to AP Automation

The average AP workflow is full of manual, time-consuming, hands-on tasks. Imagine how much easier tracking and amplifying AP performance and improving vendor relationships would be with automated workflows & processes. To learn more about how automated AP processes can save your company both time and money, download our complete guide to AP automation.

Rethink what AP can be

Chris Ogletree

Chris joined Goby as Inbound Marketing Coordinator in 2016, taking over generation and development of client-facing content, such as email campaigns, website administration, and marketing collateral. He has been an integral part in Goby's rebranding project and website redesign.

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