If you work in procure to pay, you are in a great position to help your business capture cash. You can adopt the right payment terms, offer early-pay discounts, conduct audits to recover lost revenues – and more.
Two common roadblocks, though, make it hard to bring these kinds of working capital programs to life. The first is incomplete and inaccurate supplier data. This gap in information makes it hard to set up and run effective working capital programs. The second roadblock is adoption. Even the best-designed initiatives will produce poor returns without supplier participation. Most companies have great address data but email address and contact phone numbers for only a few. Without contact data, how will you engage your suppliers?
What’s the solution? The artificial intelligence powering today’s top supplier portals can help you overcome such hurdles – once and for all. They can help you to gather better data, make smarter decisions and build supplier support.
Here are five of the many ways a supplier management portal can help you boost your company’s working capital.
1. Build a Strong Base
Top portal solutions verify and enrich supplier profile data in real-time against large public and private databases that hold millions of verified supplier records. They also can continuously add and validate supplier information over time so your vendor master stays up to date. They flag duplicate entries, locate new contact information and add industry codes. You get a single, trusted source of the truth to help you negotiate contracts, launch new programs and guide decisions.
2. Enforce Payment Terms
With a portal, enforcing payment terms is easy. Simply require each new vendor to accept your standard terms as they register. Top solutions are rules-based. They let you vary and apply terms based on region, payment type or other factors as you choose.
3. Capture Discounts
Offering early payments in return for a discount can benefit both you and your suppliers. You improve your bottom line, while suppliers get the cash they need to ease any working capital pressures. Leading portals include analytics and features that make it fully autonomous and simple to design and run an early-pay program and track results. You can segment and score suppliers to identify those most likely to participate and determine which discount terms are most likely to be accepted. You can even offer dynamic discounts, which allow every supplier to participate as needs arise, as well as update your ERP automatically to reflect new due dates and discounts.
4. Use Third-Party Financing
While early-pay discounts are great, there may be times when you have other uses for your cash. That doesn’t mean you have to suspend your early-pay program, though. Instead, you can use third-party funding that is available to suppliers through your portal. Simply click your funding options “on” or “off” on demand. It’s a great way to maintain continuity in your early-pay program, while continuing to support each supplier’s cash-flow needs.
5. Find Missed Credits
Some portals offer built-in statement audit modules to help you capture credits that might have been missed otherwise. And they automate the process from start to finish. First, analytics score suppliers and show you which are the most likely targets for an audit. Then the portal triggers an outbound email to ask the supplier to upload an account statement. The portal reconciles each statement and flags missed credits for follow-up—resulting in faster recoveries at a lower cost per claim.