An important first step in any payables optimization effort is the onboarding of suppliers, who will be asked to accept more efficient electronic payments in the form of a card payables online solution. For the buyer, the benefits of supplier enablement are clear, but a truly successful program should highlight the fact that this is a win-win situation for both buyers and suppliers.
One of the first questions we are nearly always asked when talking to buyers is how much will it cost suppliers to adopt an electronic solution and what incentives can be offered to encourage the onboarding of suppliers? The fact is that the value to suppliers is every bit as compelling as it is for buyers.
Any successful supplier enablement program will focus on the benefits suppliers will enjoy, and how a robust partnership with buyers can only strengthen the relationship and the overall supply chain ñ which is a mutually beneficial outcome.
Many suppliers are very interested in moving toward electronic receivables in order to eliminate costly manual back-office reconciliation processes. Such solutions portend significant value for suppliers in the form of improvements to days sales outstanding (DSO), reduced lockbox fees as result of the migration of paper to electronic payments, and greater security, whether it be routing and banking information being exposed in ACH or from a card payment risk perspective.
What buyers need to keep in mind is that payment optimization is a win-win for buyers and suppliers. A sustainable program offers mutual benefits that serve to strengthen the relationship.
When it comes to onboarding suppliers, each business has its own unique set of needs and preferences, which is why itís important to take a tailored approach when proposing the adoption of an electronic solution. At Fifth Third Bank, we examine the relationship with each supplier and use payment data to determine the appropriate message. We work closely with the buyer to customize how we communicate with each supplier to maximize the onboarding effort.
We help buyers bring an integrated offering to suppliers that makes the most sense for their business and will deliver the greatest benefit. By automating the receivables process for suppliers, they are able to take full advantage of critical efficiencies that lower costs, speed up payments, and improve reconcilement processes.
All too often, buyers are so ingrained in business-as-usual practices that they are completely unaware of the potential opportunities to improve back-office processes and generate revenue streams by optimizing their payables function. Fifth Third takes a consultative approach, analyzing an organizationís payment data to determine the best approach that serves both the buyer and supplier. In the end, we work to ensure the solution is a win-win that strengthens the supply chain and meets the needs of everyone involved.
One of the first questions we are nearly always asked when talking to buyers is how much will it cost suppliers to adopt an electronic solution and what incentives can be offered to encourage the onboarding of suppliers? The fact is that the value to suppliers is every bit as compelling as it is for buyers.
Any successful supplier enablement program will focus on the benefits suppliers will enjoy, and how a robust partnership with buyers can only strengthen the relationship and the overall supply chain ñ which is a mutually beneficial outcome.
Focusing on the Needs of Suppliers
While moving to card payables online solution makes sense for small businesses for a multitude of reasons, suppliers often have similar needs from a receivables perspective. Suppliers are also motivated by a desire to increase treasury efficiency, eliminate paper processing and reduce the potential for fraud.Many suppliers are very interested in moving toward electronic receivables in order to eliminate costly manual back-office reconciliation processes. Such solutions portend significant value for suppliers in the form of improvements to days sales outstanding (DSO), reduced lockbox fees as result of the migration of paper to electronic payments, and greater security, whether it be routing and banking information being exposed in ACH or from a card payment risk perspective.
What buyers need to keep in mind is that payment optimization is a win-win for buyers and suppliers. A sustainable program offers mutual benefits that serve to strengthen the relationship.
When it comes to onboarding suppliers, each business has its own unique set of needs and preferences, which is why itís important to take a tailored approach when proposing the adoption of an electronic solution. At Fifth Third Bank, we examine the relationship with each supplier and use payment data to determine the appropriate message. We work closely with the buyer to customize how we communicate with each supplier to maximize the onboarding effort.
The Importance of Taking a Holistic Approach to Supplier Enablement
By taking a holistic approach to payables optimization, Fifth Third enables buyers to target the right electronic solution for each supplier. In the case of a small business, a card payables online solution can deliver the maximum value for the supplier, addressing their own unique working capital needs.We help buyers bring an integrated offering to suppliers that makes the most sense for their business and will deliver the greatest benefit. By automating the receivables process for suppliers, they are able to take full advantage of critical efficiencies that lower costs, speed up payments, and improve reconcilement processes.
All too often, buyers are so ingrained in business-as-usual practices that they are completely unaware of the potential opportunities to improve back-office processes and generate revenue streams by optimizing their payables function. Fifth Third takes a consultative approach, analyzing an organizationís payment data to determine the best approach that serves both the buyer and supplier. In the end, we work to ensure the solution is a win-win that strengthens the supply chain and meets the needs of everyone involved.
The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever. Deposit and credit products provided by Fifth Third Bank.