One of the best ways to build lasting relationships with vendors and suppliers is to ensure timely and accurate payments. Paying on time shows your commitment to agreements and helps vendors and suppliers keep their own operations running smoothly. Accurate payments also reduce the risk of cash flow issues, disputes, and delays.
Digital solutions like Maya Business Deposit simplify the payment process. Widely used by small businesses in the Philippines, this tool serves as a settlement account and includes a disbursement feature that works as both a payroll management system and a secure way to pay suppliers and vendors.
Understanding Payment Terms
Businesses may not always have the funds to pay upfront for large purchases. Suppliers know this, so they may define terms that spread costs over time. For example, your supplier might agree to a 30-day payment term, allowing you to receive goods immediately and settle payments within a month. These terms are included in an agreement that typically contains specifics like invoicing details, payment schedules, and proof of payment requirements.
To ensure you adhere to agreed payment terms, here are some actionable tips.
1. Create a Payment Process
You need to establish a clear payment system for seamless supplier management. For example, you could assign specific roles to team members so that one person handles purchase orders, another reviews invoices, and a manager authorizes payments. Such an arrangement establishes a system of accountability and efficiency.
You also need to implement a structured payment schedule. For example, you could choose to schedule payment runs during the first Friday of every month instead of processing payments each day. This approach saves time, creates predictability for your supplier and your accounting team, and reduces the number of inquiries about payment timelines. If a supplier does follow up on a pending payment, you can refer them to the next scheduled payment date.
2. Leverage Technology
Technology can simplify supplier payments significantly. Digital systems reduce manual intervention and streamline the process. Our tools simplify financial tasks like invoice tracking, payment reporting, and online business banking through user-friendly and effective platforms.
For example, Maya Business Deposit’s disbursement feature allows businesses to make timely and secure payments while providing clear transaction records. These records help maintain transparency, which is important when building trust and reliability in business.
3. Pay Consistently and On Time
Suppliers value reliable customers who pay consistently. If you demonstrate a history of on-time payments, your supplier could give you discounts, better pricing, more flexible payment terms, or extended credit periods. This mutually beneficial approach creates value for both parties and fosters long-term, successful collaborations.
4. Negotiate Payment Terms When Appropriate
Smaller suppliers are often more open to negotiating payment terms compared to larger ones. Your negotiating leverage increases if your business significantly contributes to your supplier’s revenue.
Before talking with your supplier, assess your cash flow needs and determine your desired payment terms. Be transparent with your supplier about your financial situation and business goals. Explain how mutually beneficial terms, such as extended payment periods or early payment discounts, can benefit both parties. Aim to negotiate terms that are slightly more favorable than your minimum requirements while maintaining a mutually beneficial partnership.
5. Review Reports Regularly
Make it a habit to regularly review your payment reports. Not only will you be on top of outstanding balances, key suppliers, and total amounts due; but you’ll also spot potential issues. For example, consistent delays might indicate cash flow problems or inefficiencies in your payment processes. You can address issues promptly before they affect your relationship with your supplier.
Detailed reports from your Maya Business Deposit account provide data-based insights, helping you negotiate better terms or discounts, proactively address issues, and identify opportunities for better payment strategies.
Build Better Relationships with the Help of Maya Business Solutions
Trusted suppliers are essential for any growing business. Managing these relationships requires time, effort, and robust systems. With effective tools for documentation and cost management, you can gain the insights needed to negotiate mutually beneficial terms.
Sign up for Maya Business to access a comprehensive suite of invoicing, payment, and business banking solutions designed to simplify vendor management and foster positive relationships.
Setting up a Maya Business account lets you open a Maya Business Deposit account and use it as your settlement account. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on a PHP 1 million deposit. Furthermore, you’ll be able to send money to your partners and suppliers for free via InstaPay and PESONet, letting you save more.
Signing up also qualifies you for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months, allowing you to have another funding source to further develop your business. Just use Maya as your primary processor for all wallet and card payments. The more you use our solutions, the better the loan offer will be.
Sign up for Maya Business today to enjoy the benefits of Maya Business solutions.
