Strengthening Supplier Relationships
Suppliers are critical to the health, profitability, and performance of real estate companies. They ensure timely delivery of quality products and services and help establish efficient, well-run operations. Oftentimes, businesses misinterpret the dynamics of the buyer-supplier connection and assume the buyer wields more power simply because they generate the orders and make the payments. Buyers may fail to recognize that suppliers who feel respected are far more willing to make them a priority. They also may not realize that fortifying these crucial relationships is often simpler than they think.
Being up-front, communicative, and personable does a great deal to forge strong ties with vendors. Small gestures such as picking up the phone to discuss an issue, looping a supplier in on a new business initiative, or asking for their input or expertise help build trust and rapport and can lead to more fruitful future interactions. These less formal exchanges can encourage suppliers to share information more freely. This may open the door to notifications about better deals and offerings that ultimately allow you to achieve cost savings and remain competitive.
Along with maintaining open communication, you should also look to simplify and streamline your ordering and invoicing process with suppliers. AP automation software can help you do so. With this solution, you can easily generate and send an electronic PO to the supplier that provides clarity and instructions on exactly what’s being ordered. It’s then accessible to both buyers and suppliers in a matter of clicks, and serves as a paper trail for future reference should any questions arise. Your AP solution can also enable suppliers to electronically submit invoices to your organization, where they’re then quickly matched and routed for approval. Suppliers will benefit from elimination of manual paper handling and improved visibility.
Perhaps the single most important step you can take to be a good customer is to make on-time payments. You must extend the professional courtesy to adhere to your agreed upon payment terms and ensure suppliers get the funds they expect in a timely, reliable fashion. Cash flow is extremely important in any business and this is especially true for suppliers who may operate on tight margins. Becoming known as a late payer can tarnish your reputation and subject you to more restrictive payment terms. If you know you won’t be able to pay a particular invoice on time, it’s advisable to call your supplier and let them know you’ll be late and when they can expect payment in full. This proactive notification, coupled with the past goodwill you will have built up because of the ongoing communication outlined above, will help protect your good standing.
Research from the Institute of Financial Management indicates 64% of businesses cite slow internal processes as one of the top issues they confront when trying to pay suppliers on-time. Thankfully, the same AP automation software that allows you to better manage POs and invoices can help speed up your internal approval workflows as well to ensure you’re paying suppliers on time, every time. To take it even one step further, you may want to consider a solution that includes electronic payment capabilities that will allow you to to replace paper checks with virtual payments. With e-payments, suppliers will benefit from predictability and payment receipt in days instead of weeks.