Technology is being used every day in most business functions to increase efficiency and decrease errors. When dealing with the supplier chain, it can be highly beneficial for organizations of all sizes to implement automation. With the growth of globalization and the increases in mergers and acquisitions in the last 10 years, the need for innovative technology in the workplace increases exponentially. Many supply chain organizations are still managing processes manually which can lead to errors and payment disputes. By using automation, those problems are greatly reduced, and the entire AP department can run more efficiently.
Common Issues in the Supply Chain
In a recent study by Paystream Advisors, the most common problems that occur during the supply chain process are related to poor data management. Here are a few other issues that include:
- Poor contract compliance
- Late payments
- Lack of compliance with Suppliers
- Poor Supplier dispute/query times
Without automation each supplier account must be dealt with individually which takes more time and can lead to frequent errors. Another issue that often arises when an organization doesn’t have an automated system, is lost savings opportunities. AP automation can handle certain processes like deductions and claims saving money. This allows AP departments to better allocate AP clerks for a more efficient work environment.
Benefits of Using an Automated Tool
Many organizations are seeking methods to increase their overall supply chain efficiency and create better relationships with their suppliers. Using a vendor portal can help organizations of all sizes improve their vendor relationships. Automation addresses the most common issues associated with the supply chain and improves overall efficiency. Thus, organizations can now be transparent and yet reap the benefits of a trustworthy supplier.
When an organization implements a new automation system, it’s important to first analyze the potential return on investment. Verifying and keeping up with the ROI will give a tangible idea of the benefits of automation. It’s also important for an organization to get support from the key players like the suppliers, stakeholders, and sponsors to ensure everyone is on the same page. Once support is gained from those key players, the new automation system should be outlined in detail with a specific strategy that holds everyone accountable for their part in implementation. The last part of the implementation process should involve sharing expectations and future goals with shareholders, including other relevant organization members so that everyone has the same expectations for the new supply chain system.
Advanced technology and automation can be beneficial no matter the size of an organization. When it comes to supplier management, it can improve the communication and collaboration options when dealing with an organization’s suppliers of goods and services. Automation in accounts payable eliminates many of the common problems associated with the supply management process and increases efficiency. Using a technologically advanced system means less chance for errors and a quicker response time to requests from suppliers. This can mean an opportunity for an organization to take advantage of dynamic discounting and other perks that go along with developing good supplier relationships.