Is Your Accounts Payable Process Hurting Your Vendor Relationships?

Your business depends on strong vendor relationships—whether it's suppliers, contractors, or service providers, these partnerships play a critical role in operational success. But even with good intentions, many companies unknowingly damage those relationships through inefficient or inconsistent accounts payable (AP) processes.

Late payments, poor communication, and disorganized invoice handling don’t just cause frustration—they can erode trust, increase costs, and limit future opportunities. In a business environment where agility and reputation matter more than ever, it’s worth asking: Is your AP process hurting your vendor relationships?

Here’s how to assess your current process and improve it—before it impacts your bottom line.

1. Late Payments Are More Than Just an Inconvenience

While occasional delays happen, chronic late payments signal deeper process issues—and vendors notice. A 2023 survey by PYMNTS and American Express found that 55% of small-to-midsize suppliers experience consistent payment delays, and nearly a third say it strains their client relationships.

Why It Matters:

• Vendors may prioritize faster-paying clients

• You may lose access to favorable payment terms

• It increases the risk of supply chain disruption

What to Do:

• Establish clear invoice approval workflows with defined responsibilities

• Use automated payment reminders and scheduling tools

• Communicate proactively if a payment will be delayed

2. Inconsistent Processes Create Confusion and Frustration

Vendors need clarity: When will they be paid? Who should they follow up with? Are their invoices being processed correctly?

Without standardized AP practices, your vendors may encounter:

• Conflicting communication from different departments

• Requests for duplicate invoice submissions

• Delays due to missing documentation or misrouted invoices

What to Do:

• Implement a centralized AP system or shared inbox for vendor billing

• Create and share a simple vendor onboarding and invoicing guide

• Designate a clear point of contact for payment-related questions

3. Manual Processes Are Slowing You Down

If your team is still entering invoices by hand, chasing down approvals via email, or cutting physical checks, you’re not just behind the curve—you’re making your vendors wait unnecessarily.

Manual AP processes are:

• Error-prone, leading to incorrect payments or double entries

• Time-consuming, delaying approvals and remittances

• Difficult to scale, especially as your vendor base grows

What to Do:

• Adopt AP automation software like Bill.com, Tipalti, or AvidXchange

• Integrate your AP system with your ERP or accounting software

• Use digital payment methods (ACH, virtual cards) to speed up processing

4. Poor Communication Can Erode Trust

Transparency is key in any partnership. If vendors feel left in the dark about invoice status, payment timing, or policy changes, it can damage the relationship—even if you’re paying on time.

What to Do:

• Send automatic payment confirmations once a payment is initiated

• Notify vendors of any changes to your AP process, such as system updates or new approval thresholds

• Be responsive and respectful in vendor communications—even when there’s an issue

5. You’re Missing Opportunities to Build Strategic Partnerships

Vendors aren't just service providers—they’re business allies. When your AP process works smoothly, it opens the door to:

• Preferred pricing and terms

• Priority support or access to limited inventory

• A stronger reputation within your industry

Conversely, a poor payment history or inefficient communication may lead vendors to reconsider working with you altogether.

Final Thoughts

Your accounts payable process is more than just a back-office function—it’s a reflection of how you manage relationships, prioritize commitments, and operate as a business partner.

If vendors are frequently following up, payments are regularly delayed, or your team is bogged down in manual work, it may be time for a change. Investing in a transparent, automated, and vendor-friendly AP process isn’t just good operations—it’s good business.

Disclaimer: This article is intended for informational purposes only and does not constitute financial, legal, or operational advice. For tailored guidance, consult an experienced finance professional or AP specialist.