A key moment of truth in any trading relationship is the demand for payment for goods/services rendered. It is precisely at this juncture that the specifics of the transaction and the quality of the underlying trading relationship comes sharply into focus.
The organisational structure of many companies means that Accounts Payable department is charged with the pay/no pay decision. Often, however, the facts speak for themselves. The orderly payment of a purchase invoice is delayed by blips elsewhere in the procure-to-pay cycle. The accounts payable department end up unfairly shouldering the responsibility for this and as a consequence are forced to develop a thicker skin than might otherwise be necessary in a well-run company, in turn raising the prospect of inter-departmental problems.
Of course, at times, the supplier can also be at fault either unilaterally or almost seemingly in conspiracy with his customer contacts – but this is a consideration for another day. Some decision makers in buyer organisations can at times be accused of forcing a discipline on its own staff via its supplier base (instructing the supplier in no uncertain language that an order from a buyer representative must not be accepted without a valid PO number – is this good trading relationship practice or a circuitous route of exerting discipline on wayward colleagues?).
Buyer procurement process rigidity is a so called “best practice” employed by some organisations where the process can seemingly become the key KPI. Perhaps given the advances in connectivity of IT systems in conjunction and the partnership model, such an approach may be worth rethinking. Consider the potential improvements in a working relationship if transparency is introduced into the supply chain?
Enter automated accounts payable solutions. Using Celtrino’s end-to-end supply chain automation systems, it is possible to monitor the entire process and immediately identify where the cause of a delayed payment is, and with whom the fault lies. Using the built-in transparent reporting facilities of Celtrino, buyers and sellers can quickly and easily identify and resolve payment problems, reducing friction between parties and preventing accounts payable taking the blame once more.