Late payments to suppliers are a hazard that every company will have to face at some point in its existence. However, there are effective ways of avoiding them, with all the negative consequences they entail: late payment penalties, a poor image and a deterioration in commercial relations. It is much easier to get round this type of situation with the help ofspecially developed tools. All the more so since the Directorate General for Competition, Consumer Affairs and Fraud Control (DGCCRF) is improving its legal arsenal over time to enforce compliance with legal payment terms between professionals. So how can you avoid this scenario?
Optimal management of supplier invoices
First and foremost, since the aim is to manage late payments, all invoices that have been sent must be properly managed. Several methods can be applied to achieve this management, and they vary according to the situation of each company. Of course, before you can take precise action on these invoices, you need to check the purchase order process sent to suppliers. This is because order management is a prerequisite for receiving invoices.
All these management questions are much easier to answer using the MRP (Management of Production Resources) method. This is a calculation tool that determines net requirements, costs and production. This means that, thanks to these tools, it is much easier toavoid late payments because the company’s financial management is well explained.
Faster invoice processing
There are many techniques for processing invoices more quickly, the first of which is the dematerialisation of supplier invoices. All companies that take the trouble touse an invoice management tool have better control over payment times. Alongside the MRP technique, the JIT (Just In Time) concept also helps companies considerably to avoid late payment by their suppliers. Supplier audits can also be carried out much more easily if invoices are centralised in a single tool.
Automating invoice payments is one of themost effective ways of ensuring that suppliers meet their payment deadlines. There are a number of advantages to this, including the fact that the costs of sending and receiving invoices are reduced to zero by dematerialising them. It is also possible to benefit from extended invoice payment terms.
But for invoices to be paid on time, the company must be in a good position and have sufficient working capital for payment. That’s whyinteroperability between all these management tools is vital.
Better anticipation of unpaid invoices through software
There are a number of free software tools that can be used toanticipate late supplier payments and unpaid invoices. Thanks to these tools, companies can benefit in a number of ways:
- Time and energy saved on supplier management.
- Possible discounts on invoices: suppliers always appreciate respect for payment deadlines and give an advantage to regular customers.
- The ease with which paper invoices can be processed. This is an advantage for both the supplier and the company.
- Saves money on manual invoice processing.
- Visibility of cash flow discrepancies.
- The company’s situation is more regular and more efficient thanks to the presence of tools that provide better visibility of cash flow and the company’s budget.
If the company is in a crisis situation, late supplier payments can be perfectly anticipated thanks to management tools. In this way, it will also be easier to prevent and negotiate with suppliers and explain the situation while continuing to supply.
Use of operations monitoring tools
Once again, these management tools will enable you to monitor your operations optimally. Always with a view to anticipating delays, this software provides a very specific overview of the company’s situation. You’ll have access to all the data that indicates a fall or rise in cash flow. With these monitoring tools, it is possible to receive an alert or notification whena payment deadline is approaching. The aim is above all to preserve the relationship you have with your suppliers and avoid late payment.
What’s more, a control tool is still more practical, even if you have competent staff handling all this processing. All events relating to the company’s budget will be recorded and transmitted in real time, so that unforeseen events can be better managed.
It’s not always easy to manage supplier payments when you’re working with several suppliers at the same time. This is especially true for small and medium-sized enterprises (SMEs), which have more cash-flow problems than the average. That’s why it’s more advantageous to use tools to manage your company’s suppliers and budgets. With SaaS purchasing management software like Weproc, you’ll have the right indicators to help you avoid late payments and run an efficient business.
Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!
Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.