Using Your AP Automation Platform to Vet for “Mr. or Mrs. Right” Supplier
Automated AP systems are well known for turning manual invoice processing into highly efficient, electronic operations. But they can do much more than reduce paperwork and increase visibility.
They can also make it easier for companies to build a network of suppliers that is fully vetted, complies with corporate insurance requirements, and even accepts the company’s preferred payment method.
In essence, they can vet suppliers using a lot of the same logic that daters use to screen for Mr. or Mrs. Right: a series of checks and validations – before things proceed to the next level.
In the world of AP automation, that translates into validating suppliers’ identities before they are allowed to send invoices or transact with buyers electronically.
Using an Online Supplier Portal
Many AP automation companies enable suppliers to submit their invoices through a dedicated online supplier portal. This helps buyers process their invoices faster because they aren’t opening mail and then uploading or scanning supplier invoices.
At the same time, the portal benefits the supplier too because their invoices are routed directly to the AP department with guaranteed delivery.
In fact, in a Nexus survey of 400 suppliers, a majority cited “speed of payment” (31.8%) as the number one benefit of using the portal, followed by “acknowledgement of receipt” (19.9%).
|Benefits of Using Online Portal – Ranked 1st|
|Identify the top 3 most important benefits of using an online portal. Ranked First|
|Speed of payment||31.8%|
|Acknowledge receipt of invoice||19.9%|
|Knowing the status of invoices in your customer’s system||17.1%|
|Connecting to multiple customers in one place||9.4%|
|Elimination of paper||7.3%|
|Access from anywhere||6.3%|
|Better customer relationships (awkward calls avoided)||4.9%|
|Storage of ancillary documents required for doing business||2.4%|
|Better insights and controls (forecasting and budgeting)||0.7%|
Verify Supplier Identity Before Enabling Online Portal Enrollment
But, how do you know suppliers are who they say they are? How do you know if the company is legitimate?
- Are they your co-worker’s friend or family member?
- Are their Yelp or Angie’s List reviews real?
- Are they someone doing this on the side and are really in over their head?
- The questions go on and on…
That’s why it’s critical to verify their identity – automatically – before they can send invoices or transact with you via an online portal.
AP automation platforms can assist with this task. They can validate supplier company details through partnerships with account certification and authentication service providers, who ensure the company is who it says it is. In many cases, the portal can automatically validate suppliers’:
- Company Name
- Contact information
This validation should not be an extra cost to the real estate company – or the supplier. It should be part of the services offered.
Check if Suppliers Are on the Terrorist Watch List
It’s also important to validate that the supplier isn’t part of a terrorist organization or involved in drug trafficking. Putting ethical issues aside, any monetary transactions with these companies could be frozen or seized.
Thus, the online supplier portal should automatically verify that the supplier isn’t listed in the OFAC database. OFAC, or the Office of Foreign Assets Control, administers and enforces economic sanctions programs against countries and individuals, such as terrorists and narcotics traffickers.
If a supplier is on the OFAC list, the online portal should block the supplier from creating an account. And, if the supplier is flagged incorrectly, the supplier should be able to correct it and get themselves unblocked.
Make Sure Suppliers Meet Insurance Requirements
So, once all those checks are good, is the supplier insured properly? Again, the supplier portal (for the AP automation company) should be able to let you know if that’s the case.
AP automation companies can work with insurance credentialing companies to verify that prospective suppliers have obtained all necessary insurance, have up-to-date policy documentation on hand, and have the appropriate limits.
The Stakes are High
When it comes to finding Mr. or Mrs. Right, the stakes are high. This is especially true in the accounts payable world. The supplier you choose better be right, because you’re reliant upon them to help you satisfy customers, remain competitive, and grow. Thankfully, many leading AP automation platforms offer electronic solutions that can allow you to accept new suppliers with confidence.