7 Tips for Managing Accounts Payable to Suppliers
The management of a business is conditioned by several factors that allow maintaining financial health so that operations develop well. Here comes the importance of having a good management of accounts payable to suppliers.
The organization is an essential element for any type of company – it does not matter if it is small or big – this can be the difference between the growth and the bankruptcy of the same.
Both income and expenses must be recorded, ordered and verified carefully, since with this free text information you can corroborate the current economic situation of your company.
On many occasions, a disorganization means that it is not possible to visualize the inflows or outflows of money that really correspond, which can cause great consequences for the business.
When working with suppliers, it is normal to maintain commercial relationships that generate the acquisition of credits to pay for the merchandise or service that is needed for the company to operate normally. This situation must be handled with great care to avoid falling into default, generating interest that represents a greater outlay of money or simply damaging the business.
In addition, maintaining a good relationship with your suppliers will help you in the future to achieve better payment terms or flexibility that you never know when you may need.
Next, you will learn 7 tips for good management of accounts payable to suppliers. Keep reading!
1. Never Put Communication Aside
When talking about monetary issues, it is essential to try to create solid and clear relationships, so you must always be honest with the situation that comes your way.
If for any reason you cannot fulfill your obligation on the agreed payment date, contact your provider and inform them of the problem. Maintaining a cordial and respectful treatment so that you can negotiate a debt restructuring or a possible deferment of payment.
You must avoid falling into acts that fracture the relationship and take into account the same procedures that you carry out with your clients such as effective collection actions to apply them with your suppliers. Do not forget that in this case you are the customer.
2. Analyze all your Possibilities
When choosing who you want to work with, study well each of the options that each provider offers you.
Do not let yourself be guided solely by the value of the products or services but you must take into account what are the benefits that each one offers you, be it better payment options, discounts for bulk purchases, flexibility of terms, delivery time, quality, commercial responsibility or any other factor that may intervene in the choice.
Therefore, you can establish some purchasing policies in the company so that when choosing a supplier it is verified that they meet certain previously established criteria. Remember that analyzing each element can mean better decisions for the business.
3. Keep your Invoices in order
When managing different providers, payment dates and credit limits, confusion or forgetfulness can occur due to not having the information organized.
For this reason, it is important that you establish a calendar where you can view each invoice according to its due date so that in this way you know what your payment priorities are and you can meet the deadlines before they expire.
This way you will avoid incurring in arrears, interest or making money disbursements higher than what you normally should. In the same way, you avoid creating bad relationships with your suppliers.
4. Negotiate with your Suppliers
If you have the opportunity to pay a debt in full, reach an agreement with your provider to grant you some type of discount for fulfilling the obligation in advance.
This can help improve the financial health of the company and offers you the possibility of obtaining future benefits with your supplier for being considered a responsible customer.
5. Include Each Expense
Sometimes, those credits or payments that are acquired with a longer period of time are not taken into account. You must keep in mind each commitment that you have previously obtained, such as: car, bank or other insurance that is carried out sporadically.
In this way, you will not find yourself facing an unforeseen expense or that was not contemplated in your budget, which could affect your liquidity at the time.
Each account payable to suppliers must be accounted for, recorded and considered.
6. Verify the Purchase Record
Good administration is essential to achieve success, so you must keep all your purchase records updated _if possible daily_ to avoid setting aside any money outlay.
Each expense counts at the moment of knowing the cash flow of your company, if they are not recorded on time, wrong estimates of the business situation can be made and this leads to errors, especially when making important decisions.
7. Automate your Accounts Payable
The implementation of technology can help you significantly in the organization of accounts payable to suppliers. Currently, there are many digital tools that make your life easier.
Management software offers you the possibility of organizing all the information on a single platform so that if you need any information they are able to offer it to you in minutes.
Likewise, it will keep your suppliers classified as well as their invoices by due date, amounts and credit terms. Which allows you to globally view all the data you need to fulfill your obligations at any time.
In addition to this, they are able to create alerts and payment reminders so that no details are overlooked. These tools can also help you with the management of your accounts receivable and many other operations, minimizing errors to help you carry out a better administration.