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How smoothly would your business run if vendors didn’t deliver on time? From raw materials to essential services, vendors are often the unsung heroes of business operations.
Yet surveys have found that 48%–87% of invoices in the U.S. are paid late, leading to strained relationships and operational disruptions. When payments are delayed, it’s not just inconvenient for vendors, it puts your entire supply chain at risk.
When you treat vendors as true partners, you create a ripple effect of reliability, goodwill and, ultimately, better terms and services for your business. But when they’re treated as just another invoice to clear, it shows and it hurts both sides.
Signs your vendor relationships might be slipping
Not sure if your accounts payable (AP) processes are affecting vendor relationships? Watch for signs like frequent payment follow-ups, where vendors are chasing you to settle invoices, a clear indicator of their frustration. You might also notice vendors becoming less flexible, unwilling to accommodate last-minute requests or hesitant to offer favorable terms.
Another red flag is the loss of perks, such as preferred supplier benefits or previously lenient payment terms being tightened. These issues often point to gaps in your AP team’s processes or, more critically, a lack of clear guidance and policies from leadership.
Setting the tone for strong vendor relationships
As a leader, the tone you set at the top influences every part of your business, including how your team manages vendor relationships. If leadership treats vendors like partners instead of just “that stack of invoices no one wants to deal with,” it sends a powerful message. This mindset shift creates a ripple effect that builds trust, reliability and long-term collaboration; also, it might just stop those awkward follow-up emails in their tracks.
Start by redefining how your team views vendors. Vendors aren’t just bills to pay, they’re critical contributors to your success. Make this mindset shift a part of your organization’s culture, and ensure everyone understands the value vendors bring to the table. When your team recognizes vendors as partners, it transforms the way they approach interactions and payments.
Next, establish clear policies that set expectations for vendor management. These should include timely payments, structured dispute resolution processes and thorough accuracy checks. Research shows that businesses using automated accounts payable solution improved payment accuracy, reducing friction and creating smoother interactions with vendors. Clear policies provide a foundation for consistency and reliability in every transaction.
Empower your accounts payable (AP) team by equipping them with the right tools and authority. Instant payment platforms can help make payment processes faster and more efficient, giving your team the ability to proactively address vendor issues before they escalate. An empowered team, backed by modern tools, is better positioned to meet vendor expectations and maintain strong partnerships.
Finally, build a culture of respect and open communication because nobody likes being ghosted, especially your vendors. Encourage your team to keep them in the loop, even if it’s just a quick update about payment timelines or a heads-up about potential delays. Proactive communication shows vendors you value their partnership and aren’t just dodging their calls. A little respect and transparency can work wonders, turning vendors into loyal allies rather than frustrated bill collectors.
Smart policies to build trust and collaboration
If you want to build stronger, more reliable vendor relationships, it all starts with smart policies that create trust and collaboration. First, paying on time—every time—is key. Timely payments are a clear sign of respect, and vendors appreciate the predictability. In fact, businesses that consistently pay on time are more likely to secure early payment discounts. Next, automate your AP processes. Manual systems are error-prone, and vendors will notice. Automation can help reduce mistakes and smooth out transactions. Automated AP systems can cut operational costs by 81% and improve efficiency by 73%. Don’t forget to customize payment terms when possible.
A little flexibility can go a long way in strengthening relationships, whether it’s splitting payments or adjusting timelines, these small gestures build goodwill. Finally, keep the lines of communication open. Nobody likes being left in the dark, especially when delays happen. Proactive updates reassure vendors that you value their partnership and are working to resolve any issues. These smart policies will set the stage for a lasting and productive vendor relationship.
Vendor relationships start at the top
Strong vendor relationship management isn’t just a “nice-to-have”, it’s a competitive advantage. When you invest in smart policies, automation tools and a respectful approach, you’ll build trust, earn loyalty and keep operations running smoothly.
Take a moment to review your current AP practices. Are you empowering your team with the tools and policies they need? Are you treating vendors like the partners they are? A few small changes can make a huge difference. Vendors who trust you will stick with you during uncertain times, go the extra mile and even help your business grow.
Originally published on Forbes.
