Turn Vendors into Partners to Succeed with ePayments

A book of checks may cost only about $10, but for businesses that use those checks to pay suppliers, the costs are much more. According to RPMG Research, paying invoices by check costs an average of $31. In many companies, the process is manual and error-prone.

By contrast, RPMG reports that ePayments cost on average only $9, with additional savings due to the simplified, automated processing that comes with them. The payment and reconciliation processes are integrated and supported electronically. Additionally, there’s no need to buy paper checks, store them securely, and spend time loading, printing, and mailing them. The risk of checks being lost or stolen is eliminated.

But those benefits accrue to the payer, and you can only get those benefits if your suppliers agree to receive ePayments. According to Ardent Partners, most of the barriers to adopting ePayments come from supplier resistance. In order to overcome those barriers so you can reap the benefits, you need to turn your suppliers into partners in improving the payments process.

Sell Suppliers on the Benefits of ePayments

The first step in turning suppliers into ePayment partners is to point out the ways ePayments will benefit them.

Chief among these benefits are the guaranteed funds, improved cash flow, and elimination of the time and money spent processing paper checks. The faster payments improve the vendor’s days sales outstanding metrics, while the prompt payments and detailed remittance information help reduce the administrative work on the vendor’s side of the payments process as well as on your side of the transaction. There’s less time spent responding to inquiries and resolving disputes.

Additionally, EPayments can help suppliers achieve compliance with the PCI data security standard. In some cases, banks will reduce fees for suppliers who adopt ePayments.

You can point out two more ways ePayments can improve a supplier’s cash flow, also. You can offer to do more business with vendors who accept ePayments by giving them preferred supplier status. You may even choose to share some of the cost savings you achieve through ePayments with your suppliers.

Help Suppliers Sign Up for ePayments

Don’t leave your suppliers on their own when it comes to signing up for ePayments. Making it easy for them to enroll and supporting them through the process will help gain their acceptance. Make the process as simple to follow as possible, using a well-designed online enrollment system that prompts them through all the necessary questions.

Integrate ePayments into All Your Vendor Interactions

Help vendors see the value in accepting ePayments by helping them integrate it into their other interactions with you. A single application that lets vendors submit invoices, track their payments, and view reports will add value for them. Make the data accessible to their ERP system, enabling vendors to easily incorporate the data into their analytics processes.

Build Relationships to Build ePayments

When you pay invoices by mail, there typically isn’t much interaction between buyers and suppliers; the Post Office acts as your go-between. Improving the payments process with ePayments requires changing the nature of the interaction to a true, working partnership. By having the buyer’s accounts payables department talk with the vendor’s accounts receivables department, you can understand each other’s challenges and work together towards a solution that benefits both sides.

More than likely, ePayments will be part of that solution. Ardent Partners reports that more than half of suppliers are now open to ePayments. Buyers who approach their vendors and explain the benefits of ePayments for the supplier, who offer assistance signing up for the process, and who offer increased purchases and improved payment terms along with the ePayments will find their vendors eager to embrace the new relationship and new technology.