How to Maintain Healthy Relationships with Vendors

If a Vendor Bill Converts from Current to Past Due, Then Get Notified in Slack and/or Workplace by Facebook!

In order for businesses to sustain a consistent delivery of qualitative products and services to their customers, it is critical to maintain healthy and trustworthy relationships with its vendors and suppliers.  In most vendor-customer relationships, the vendor provides goods and/or services to the customer with the expectation that they will receive payment within the specified terms of their invoices.  Initially, all of the risk falls on the side of the vendor (particularly in newly established relationships).  It is unfortunately very likely to provide products and/or services to a customer without getting paid.  Therefore, it is important for businesses to be mindful of the fact that their vendors are acting in good faith and to reciprocate that same level of trust by making sure that you hold up your end of the deal and pay their invoices on time. 

In events where vendors need to remind you of outstanding invoices and past due balances, you (as their customer) initiate the beginning of a potential (and often times irreversible) deterioration of your relationship.  From the vendors perspective, they may feel as if they no longer need to prioritize you as a preferred customer when you are not prioritizing them as a trusted supplier. Fortunately, there are several ways in which business customers can maintain the integrity of relationships with their vendors even if they are unable to pay the full balance of their bills on time.  Let’s analyze a couple of scenarios and solutions to common events that can damage a relationship between a customer and vendor:

  1. Due to limited cash flow, you are unable to pay your vendor’s bill by the due date.  As a courtesy to your vendor, informing them with a quick heads up that you haven’t forgotten about their invoice can go a long way.  Your vendor will appreciate this information because you are reiterating your promise to pay for the goods and services that they have provided to you in good faith.  Additionally, you are relieving your vendor of the burden of contacting you for purposes of inquiring about a status update.  As a business owner yourself, it is no secret that collections can be a major headache that requires time and effort that could otherwise be used for more important tasks, such as growing your business.  Being mindful of this fact offers reassurance for your vendor that you are committed to a long and healthy relationship.
  2. Your vendor sends a reminder for an invoice that was either misplaced or never received.  Ensure that your company has solid bookkeeping and record-keeping protocols in place that allow you to properly track vendor bills and accounts payable activity.  Equip your company with a robust accounts payable application like that can automate and foolproof virtually all components of managing vendors and bills.  When a vendor is aware that you have a sound and organized back office, it increases their level of trust in doing business with you.  One of the worst explanations of not paying a bill on time is claiming that you never received the bill and therefore was never on your radar.  In most scenarios, customers may utilize this particular excuse once and only once.  When you are involved in this situation, be sure to clarify with your vendor the appropriate invoicing methods in order to prevent this from happening again (such as advising them of the correct email address to use to remit their invoices).

Pinger, an intelligent notifications assistant that links accounting system events with your preferred communications channels, can help facilitate and sustain positive relationships with your vendors by checking your accounting system daily for vendor bills that are past due – and notifying you via Slack, Workplace by Facebook, email and/or text messages.  With this particular vendor bill ping enabled, your company is equipped with a solution that allows you to proactively monitor accounts payable in order to ensure your vendors are one of your top priorities. 

If you receive a ping notification that a vendor bill is now past due, you are immediately prompted to investigate reasons for why that particular bill has not been paid.  Common discoveries and actions during type of investigation include:

  • In your accounting system, you recorded the payment to the vendor as a check rather than applying it as a bill payment (thus duplicating the expense).  Simply converting the check to a bill payment will alleviate this issue and close out the bill.  Additionally, it will prevent you from repaying that bill again in error.
  • You were unaware that the bill has not been paid.  Now, you can take immediate action by paying the bill and sending your vendor a friendly note that payment is en route.
  • You actually sent a check out to the vendor via but the bill is still open within your accounting system.  Check for any sync errors.  This will also allow you to clean up the clearing account on your balance sheet.
  • You are aware that the vendor has not yet been paid.  Notify your vendor with a quick update that you haven’t forgotten about them and provide them with an expected ETA on when they can expect to receive payment.

Taking immediate action and addressing past due vendor bills may also allow you to avoid late fees, notices and calls from collection agencies.  Most small businesses are surprisingly understanding and sensitive to the struggles of running a business.  Sending updates to your vendors (especially before they have to reach out to you) can speak volumes of what type of business owner you are.

Pinger’s notification feature on past due bills provides a foolproof way to ensure that you maintain positive and healthy relationships with your vendors.