From the smallest start-up to the largest enterprise, supplier relationship management (SRM) is undoubtedly a business priority. Businesses with a robust SRM system in place can track supplier contributions to their business over time and spot inefficiencies before they lead to significant losses or soured relationships.
The strength of the relationship your business forms with a supplier might depend on how critical their goods or services are to your organisation, but there is a way to ensure every relationship remains positive and profitable.
Here’s how to improve your supplier relationship management and better maintain your business relationships with 5 tips:
Clear communication is the foundation of any successful relationship, especially with your suppliers. From the very start of your business relationship, it pays to invest time and effort into developing effective, efficient ways of communicating with each other.
For example, if a payment is going to be late, let your supplier know as soon as possible. Rather than risking it negatively impacting your relationship, straightforward and prompt communication will be appreciated as you give them time to plan around any delays.
Whenever signing on a supplier, ensure that all stakeholders have a clear understanding of what the agreement entails. Both your team and theirs must know what’s expected of them in terms of deliverables, key performance indicators (KPIs) and which lines of communication to follow.
This, combined with regular status updates between your points of contact, will prevent misunderstandings that could be costly to your pocket or threaten the health of your supplier relationships.
Give each supplier personalised attention
Have your organisation build personal relationships with every supplier individually. If necessary, assign a customer service representative to each account to ensure they’re looked after — no matter how big or small.
In the age of global supply chains and digital business, a dedicated representative can help build a positive and productive relationship that’s culturally sensitive and has a personal touch — even if you’re sourcing as an enterprise.
Recognise your interdependance
Managing your business relationship with a supplier poorly can be detrimental to your own business. For example, while companies may extend supplier refund periods to occasionally cover their own capital requirements, turning it into a management method threatens the entire supply chain — especially when working with smaller businesses that don’t have enterprise-level reserves.
Late payments can negatively affect your relationships with suppliers. Worse still, you could risk losing them from your supply chain entirely if they end up closing their doors. Recognise their success as contributing to your own, and do everything possible to support them and secure a productive, long-term business relationship.
While supplier relationship management is about more than just money, even the best relationships will sour unless accounts are promptly settled. While communicating late payments is key — and occasionally they are unavoidable — a manual Accounts Payable (AP) process will increase the likelihood of playing catch-up on payments where invoices have slipped through the cracks.
AP automation helps settle accounts quickly — and it may just be what improves your supplier relationships.
AP Automation can help improve supplier relationships
AP solutions also give you full control and transparency over your procurement process — making all documents and communications related to a particular supplier process available anywhere and always just a few clicks away.
Manual processes count for over 30% of AP costs and seriously put your company at risk (late payment, long invoice approval time...)In this webinar replay, find out about the next generation of AP automation that makes high-performance technology accessible for all.