An integral part of running any business involves logistics. Logistics are a critical part of any organization’s planning and execution of its business concerns. Supply chain risks are up considerably, with the threat of business interruptions higher than in previous years at a whopping 42%. Suffice to say, managing and attenuating risk is now more important than ever. Outside of the supply chain, managing your vendors/suppliers is crucial to preventing business interruptions and maintaining good relationships. Fortunately, there are plenty of software and enterprise management systems available these days to help in this endeavor. Here are a few reasons to use one to improve your supplier/vendor management and relationships.
Build A Better Relationship With The AP Department
Driving a positive relationship with your Accounts Payable department shouldn’t be terribly complicated. All it takes is a little bit of effort and following established protocols. This means better supplier management. To drive better supplier management, you need to build a strong reputable supplier base. This starts with gathering intelligence and information about potential suppliers and assessing the information to determine if working with them will be beneficial for the organization. Then it’s a matter of working with them to determine if their requirements and procedures are going to be compatible with your organizations. If you like the supplier, you can start building the supplier base and put contracts together. When it comes time to managing those suppliers, consider implementing supplier management software to ensure everyone involved gets the most out of the relationship.
Drive Better Compliance
Compliance is a hot issue across most industries. Almost every industry needs to conform to the Payment Card Industry (PCI) standard. But there’s also the matter of internal compliance with established purchasing policies. Using software Solutions also helps you avoid duplicate or risky suppliers, which can be a real problem if past history indicates poor service. The last thing you want to do is break company purchasing and procurement policies by going with a disreputable supplier.
Improve Supplier/Vendor Relationships
Never underestimate the power of a high-quality, strong relationship with your suppliers. Good relationships can bear some excellent fruit throughout the course of the relationship. Avoiding delayed payments are good ways to build positive relationships. But there’s a little bit more to it than that.Sending early payments, for example, might result in an early payment discount that can save some money in the long term. Vendors with which you have a positive relationship or are going to be more willing to work with you, negotiate better contract benefits, and may even be able to step in quickly during emergency situations. Positive relationships are the driving force behind any successful venture, so building/maintaining them with your suppliers is crucial to your success as a functioning. Supplier management software helps you keep in touch with suppliers, give them a convenient way to get access to information they need, and make your relationship seamless.
Smooth Workflow
Working in any administrative or financial discipline requires attention to detail, organizational skills, and a thorough understanding of the finer points of the job. When it comes to workflow in an accounts payable or procurement department, the smoother the workflow the better. Improving the department workflow means doing what you can to Foster and develop your supplier relationships while using any tools at your disposal to that, assess, and work with them in a reasonable manner.
Risk Visibility and Assessment
One of the primary reasons people buy health and life insurance is part of a comprehensive risk assessment strategy in their own lives. Making sure you have insurance covers you against certain risks and events. The same can be said of managing suppliers. In this case, some suppliers might present a measure of risk, and your supplier management procedures or software act as a form of insurance to guard against those potential risks. Insulating your organization and guarding it against potential risks, especially those related to purchase orders and vendors, is a pivotal role of your department. Any Department worth its salt will be able to handle risk assessment on top of their other job duties. Using software tools in conjunction with their own tenacity and worthwhile abilities, they can make the organization better for the future.
