This article is posted in Global Trade and was penned by the CEO of a payments automation company. The piece is an appeal to the sensibilities of buyers to make sure that while closely managing cash positions during the pandemic, they don’t simultaneous damage their supply chain relationships and general health. That would seem a reasonable position:
‘Even though a company’s first responsibility is to its bottom line, it cannot afford to forget that suppliers are ultimately responsible for their ability to deliver revenue. It’s especially important right now that companies take care of their suppliers for the supplier’s benefit as well as their own.’
He goes on to make some interesting points based on his experience in the corporate financial operations processes, including one point that most don’t typically think about: the emotional stress placed upon those in AP and AR, especially in tough times. This stress can lead to high turnover rates and a company in constant re-training mode. Such a situation is sub-optimal and costly to the bottom line, exacerbated by the existential threat of economic disruption.
So how does this all tie in with payments automation? In this case, his payments company serves as the central supplier contact and facilitator for a buyer’s payables operations. By delivering payments to suppliers in their preferred methods and improving upon data and payments options, they create a better experience for suppliers. So the overall message is to keep some balance in the power structure, so as to weather the various storms that will occur and ultimately have a better supply chain.
‘It’s our goal to offer better payment products, faster payments, and more real-time data. Our most valuable report cards take supplier opinions into account, and we are proud to consistently receive satisfaction ratings above 98% from the suppliers who interact with us….Buyers have immense power over suppliers, and sometimes they press that advantage hard. As a payment automation provider, we advocate for and support our customers—the buyers. However, we have found that supplier advocacy results in measurable success for all parties involved.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group