6 strategies A/P uses to get more vendors to embrace electronic payments

Getting as many vendors as possible to accept electronic payments remains an ongoing goal for companies of all sizes.

On the front lines in that quest? Your Accounts Payable department. They have a lot to gain from a more paperless payables process, and many of them are making significant strides on this front.

So just what have they done that’s moved the ball forward? Check out six successful strategies that have more vendors saying “yes” to e-payments.

Strategy 1: They spell out specific savings

Yes, every vendor knows the potential to save both time and money comes with electronic payments. But why not show them just how much in dollars, hours, etc.?

With a few quick calculations your A/P department can give a specific supplier an idea of how much they’d save in a month by switching from paper checks to the Automated Clearing House (ACH) Network, for example. Consider, too, how long mail takes these days (which is likely a lot longer than usual this past year) and factor that into the potential savings as well.

Strategy 2: They share stories from skeptics

Sometimes there’s no one better to make a case than someone who was once in that exact same situation. Several of your peers have had luck by sharing success stories of previously e-payment-skeptical vendors who took the plunge and were happy they made the switch.

Even better: See if you can offer to connect one such vendor with another who may be resistant or on the fence.

Strategy 3: They revisit contract terms

Realistically if you have vendors you’ve been working with for a long time, you may have old-school language written into contracts that requires you to pay by paper check.

Now’s a great time to review contracts for such language. Wherever possible, your company can make amendments to clarify that electronic is your company’s preferred payment method.

Strategy 4: They start new vendors off on the right foot with e-payments

Of course with new vendors you have a completely clean slate and can set payment terms as you want them.

Consider following the lead of one company we know. They integrated their desire for electronic payments right into their vendor onboarding system. Each time they bring in a new vendor it has to fill out a form with its payment method and info. Recently the company adjusted the form so checks are nowhere to be found. Instead, they offer virtual cards first, then ACH and then “request an exception.” That way a vendor can technically still request a check if absolutely necessary, but it’s certainly not the default choice.

The result? The vast majority of new vendors go the e-payment route.

Strategy 5: They pique vendors’ curiosity

Sometimes, a little subtlety can go a long way to getting what you’re after.

Maybe not every vendor is ready at this very moment to switch to e-payments. But they likely will be at some point. So you want to keep the idea top-of-mind.

That doesn’t mean having A/P raise the issue during every interaction. But something as small as a change to an email signature can keep e-pay on suppliers’ radars.

Think about posing a question from one of your A/P team members: “Interested in getting payments faster?” Then give vendors an action step: “Email ap@mycompany.com”

It’s a light touch, but one that could prompt some vendors to approach you.

Strategy 6: They hit ’em where it hurts: the wallet

Then again, sometimes a heavier hand is needed. Maybe your company only wants to partner with vendors that are “electronified” in their processes, both in sending invoices and receiving payments.

That’s when some financial disincentives can make a big difference.

One finance department we know added some new conditions for any vendor they worked with:

• They charge them $100 for every paper invoice they have to process, and
• They charge another $100 for every paper check they have to mail out.

There’s no administrative hassle – the charges come right off the vendor’s payments.

But for the most part, these new conditions are enough to convince vendors this is one company that takes transitioning to digital very seriously.