29 Aug 10 Tips for Providing Best-in-Class AP Vendor Service
When it comes to vendor relationships, it’s not always about paying the invoices correctly and on time.
It is vital to build relationships with vendors. Following are some tips for providing best-in-class service to your vendors:
- When an inquiry has been made either by phone or email, respond to vendors promptly. Set a policy within your AP department to respond within xx hours and stick to it. Strive to respond to all vendor inquiries the same day, even if just to say you are working on the problem.
- Contact vendors if payment is going to be late. If there is a problem processing an invoice or getting approval and causing the payment to be delayed, let the vendor know up front and tell them when they can expect payment. This helps build the vendor’s trust and confidence in the AP department and your organization and can help to avoid credit holds or holds on needed inventory, etc.
- Hire people with not only AP skillsets, but also customer service and communication skills. Improving the level of communication in AP can make the daily tasks go more smoothly, as well as raise the perception of AP staffers and their capabilities. And, building AP’s perception and reputation as a business partner and not just a costly back-end operation is important, so anything that helps increase the esteem is a good thing. Look for people who can understand multiple sides of an issue, who demonstrate problem-solving skills and who keep calm under pressure. Train them on how to diffuse tense situations.
- Meet with your team regularly and discuss customer complaints that come up regarding payment problems. You always want to know what the problems are so you can fix them. It’s a good opportunity for managers to stress the importance of good vendor relationships.
- Develop welcome packets for new vendors. Include a letter that says, Welcome to Widgets R Us. We are looking forward to working with you and to having a mutually beneficial business relationship. You can also include a W-9 and contact phone numbers for AP. Set expectations, i.e., you can expect your invoices to be paid within xx days from invoice date. Let your vendors know where they should send invoices — to AP, procurement or other.
- Be consistent. When interacting with AP’s customers, it is important to have rules or standards and be consistent with them.
- Collaborate with vendors. If there is a problem with the invoice, let your vendors know right away. For example, if your company’s order arrives and you find that the vendor did not send the correct quantities, some organizations will automatically short pay the invoice as a matter of policy. Short paying without explanation can create confusion for your vendors. It can also damage vendor relationships. Studies show that on average 5% of invoices are blocked or put on hold, and of those, less than one quarter are because of a vendor dispute.
- Maintain metrics on vendor and in-house inquiries. According to a TAPN survey, 89% of AP departments do not track the amount of time AP staff spend dealing with invoice inquiries. As with any metric, tracking dispute resolution time is enough to make the team want to improve it.
- Vendor inquiry/customer service automation can be your ally. Vendor self-service portals allow your vendors and internal customers to access invoice status via the web. Vendor portals cut down on frontline calls and make it easier to resolve issues when vendors do call because vendors can do research before they call. Vendor self-service portals help solve many vendor issues, leaving AP staff to address difficult disputes. No longer dealing with 80% of the inquiries that ask if payment has been made, the AP team can focus on the 20% of inquiries that are real problems. Or, best yet, deal with other more value-added tasks such as spend analysis and dynamic discounting.
- Make friends with procurement — they have the vendor data and the relationships.
Learn how an InvoiceInfo self-service portal can benefit your company; call (678) 335-5735 today or request more information online!