Supplier Early Payments Are Simpler Than Ever With Online Portals
Supplier early payments yield advantages to both suppliers and to accounts payable. Suppliers have their cash flow sooner, and AP often can take advantage of discounts for paying early. For many departments that lack proper automation for their invoice management, taking advantage of supplier early payments sounds like nothing more than a dream—as they fight through the nightmare that is chasing approvals and trying to avoid late fees.
The idea of paying suppliers early doesn’t have to just be a dream, though. With high-level automation and the use of online portals, many successful B2B companies have made that dream a reality, seeing significant increases in discounts due to supplier early payment. Online supplier portals provide AP with a speedy invoicing process, visibility, and the ability to capture discounts.
With an online portal that offers robust visibility, you can see you can see when invoices were submitted and when payment was made. On top of that, approvals are routed to the right user, and often feature automatic escalations—which means no more chasing approvals for AP, and thus, faster invoice processing times. With approvals and payments happening so quickly and conveniently through a portal, accounts payable departments utilizing high-level automation are finally able to get their invoices submitted not just on time, but early. Early payments then bring in the opportunity for dynamic discounting.
Dynamic discounting (also known as early-pay discounts) is a great tool in a solution’s online portal that can be used to capture discounts based on supplier early payments. Enterprise-level automation solutions utilize advanced algorithms in real-time to determine these discounts. The appropriate discount for the supplier and customer is calculated based on the selected date and terms previously decided on. The supplier agrees to the dynamic discount and can look forward to a payment that meets their schedule. Once the supplier decides the date that they want to be paid for their product or service, the automation solution automatically calculates the discount amount.
Win-Win for Both AP and Supplier
When it comes to supplier early payments, suppliers benefit because they’re receiving their payments faster, thus increasing their cash flow. On the flip side, saves significant amounts of money for their company. These kinds of savings make AP stick out to their company as a department that brings their company huge savings—proving that they’re a department to be proud of and worth investing in.