As a business owner or manager, vendor payments are an essential part of your operations. Whether you are a small business or a large corporation, managing vendor payments can be a challenging task.
In this article, we will explore the importance of vendor payments and common challenges businesses face when paying vendors and provide tips on how to streamline your vendor payment process.
Without further ado, let’s dive straight into it!
What’s Vendor Payment?
Simply put, vendor payment is the act of paying a large number of vendors who have professional relationships with your company or business.
It is also categorized as a bill that needs to be paid or an account payable to ensure the continuity of services or supplies.
Any company that wants to maintain its effective operation must manage vendor payments in a timely and systematic way in order to foster positive relationships with vendors that’ll ultimately boost productivity.
That’s not always the case, though, as some businesses flutter in fulfilling this part of their responsibility.
“A friend who runs an SME in Nigeria recently told me about their struggle to get paid for work they did for a large corporation.
“While the service was confirmed satisfactory and invoices were accepted nine months ago, payment has not been made.
“Understandably, they are reluctant to involve lawyers or otherwise escalate the situation,” said Mogbekeoluwa Koye-Ladele — a retail manager at a top firm overseas, on how a close acquaintance of his was subjected to an anomaly as regards payment.
It could have been avoidable, yeah?
While a couple of things about Koye Pal’s ordeal aren’t clear, it’s glaring that the big corporation in question has lost a reliable vendor and soiled its company’s reputation after taking vendor payment with levity hands.
Why is Vendor Payment Important?
Maintaining positive relationships with vendors requires prompt bill payment. Vendors are more likely to deliver high-quality products and timely services when they are paid on schedule. This will certainly facilitate the efficient operation of your business.
It doesn’t really matter if your business is well established or you are just growing — late payments will never be a plus to you. Delayed payment will most likely strain relationships and may spur vendors to provide subpar goods or services.
Also, paying your vendors sporadically may require them to take out loans in order to fulfill their obligations, which would incur interest fees and exacerbate their already difficult financial issues, taking a toll on their level of concentration.
How To Make Supplier Payment Easier
- Negotiate Payment Terms: It’s critical to come to mutually beneficial payment terms when contracting with vendors. This can entail establishing payment due dates that compliment your financial flow or giving discounts for on-time payments.
- Prepare Ahead: Making a plan in advance is one of the best strategies to guarantee prompt vendor payment. This entails planning a budget, estimating costs, and preparing for cash flow. You can make sure you have enough money to pay vendors on time by doing this.
- Employ electronic payment techniques: Using electronic payment techniques helps speed up and safeguard vendor payments, such as wire transfers and electronic funds transfers. These techniques do away with the necessity for checks and lessen the possibility of fraud or mistakes.
- Maintain Accurate Records: To make sure you don’t forget any payments and to keep track of your spending, it’s crucial to keep exact records of all vendor payments. Accounting software allows you to maintain your data and provide reports.
- Use Earnipay’s Vendor Payment Solution: With Earnipay’s vendor payment solution, you can pay multiple payments at once rather than wasting precious business time doing rather than having to process each payment individually.
In today’s fast-paced world, it’s crucial to have a payment solution that is both convenient and secure. That’s what you’ll get from Earnipay’s range of features that make it the perfect payment platform for all payment needs.
It saves time, never misses, and gets the job faster than you have to conclude about your next meal!
If you are looking to pay multiple bills and vendors, then Earnipay is the right solution for you. Visit https://earnipay.com/products/bulk-payment to get started.