Late vendor payments a problem? Follow these steps

Late vendor payments can lead to your A/P department fielding a lot of phone calls and emails from a vendor.

This can damage your company’s relationship with a vendor fast if it persists.

Because you want to get things moving back in the right direction and prevent late fees, it’s important to address the reason for any payment delays as soon as possible.

So your A/P manager needs to take a deep breath and follow these three steps recommended by third-party CFO services provider DeepSky.

Why are vendor payments late?

Step 1: Verify the invoice is legitimate first. Before automatically pushing a payment through, keep in mind the problem might not be on your end.

For instance, is it possible the vendor’s accounting records are inaccurate? Could this be a duplicate invoice?

And it’s crucial to check that this isn’t a scammer imitating the vendor.
Check the email address for typos. If something seems off, call the company for confirmation of the balance using a trusted phone number.

Step 2: Double-check for any invoice discrepancies.

Is the accounts receivable information on the invoice correct? And are the right contact details listed?

Does the amount or quantity match what your firm and the vendor originally agreed on?

Step 3: Follow up.

If the unpaid invoice is valid, don’t panic and just process the payment as quickly as possible.

It’s smart to pause and take a closer look into your firm’s A/P processes. When you do, it may identify how the invoice managed to slip through the cracks.

Find out where the breakdown happened, why it occurred and what can be done to prevent that situation from happening again.

To keep the vendor relationship strong, it’s a good idea to follow up with your contact to reassure them that the problem’s been solved.