24 Nov Vendor Inquiries: Step Back and See the Forest
A broken P2P process generates vendor inquiries.
When a vendor contacts your organization about an invoice, AP has an opportunity to do more than solve the immediate question or problem. Vendor interactions offer AP a chance to fix process problems, reduce inquiries, and improve vendor relations.
But in customer service, AP often can’t see the forest for the trees. Accounts payable customer service staff are focused on the immediate call or email. There is an appropriate urgency to it. But in failing to take a broader perspective, AP misses the opportunity to resolve underlying problems, which would better serve the vendor and eliminate future inquiries.
The 2020 Accounts Payable Customer Service by Financial Operations Networks finds that 53 percent of organizations have a response-time policy that governs vendor inquiries. Certainly, if you want good vendor relations, you want your team to be responsive to your vendors. But there is a potential problem lurking in a “response time” policy. Be careful what you ask for.
Commonly, AP faces a slew of emails or phone messages. The response-time metric reinforces the notion of “getting through them.” The person focuses on answering the inquiry and moving on to the next. But if there is a process-related problem, the process gap will continue to drive recurring inquiries. The issue behind a payment hold-up could be incorrect pricing or incomplete information on the invoice, delayed invoice delivery to accounts payable or a poor receipt process (which is often the problem). But providing such “one-off” service, though quick, is not best.
Judy Bicking, process consultant, speaker and author, says AP customer service often fails to look at the process. But, she says, “If my job is really to build a good strong supplier relationship, I need to have a different attitude. I should say, ‘I’m sorry to hear that invoice is late. Let’s look at what’s going on.’ Allow the AP staffer to really work with the supplier not just to fix the one late payment but fix the process. That improves all the future invoices.”
Rather than striving to answer the inquiry in two minutes or less, look at what’s behind the question. Why did the vendor have to call? Is there a break in the process that can be fixed, so you won’t have to take that same call again?
The goal, Bicking says, is to “Correct the process so that vendors are paid without a lot of hand-holding and touchpoints. Rather than dealing with questions ‘one-on-one-on-one,’ which is where everybody lives, look at the bigger picture.”
Along with looking for underlying problems, there’s another aspect to shifting perspective in vendor relations. Think beyond the particular question to ask the vendor about other invoices they might have outstanding.
To illustrate, Bicking describes the typical approach to a vendor call: “We figure out that it was the receipt that is blocked. So, I say ‘No problem, I’m going to call Sally and get her to get that receipt in so you can get paid.’ You’re happy, I’m happy, it’s a good call, right? I accomplished my job in the productivity of answering the inquiry. I was nice to you. You know when payment is going to be coming and you move on to your next past due.
“But the reality is you’re going to be calling me again on the next invoice, and the next one and the next one. But what if I said to you ‘By the way do you have any other invoices in the queue that we owe you for?’ (I may not know because the invoice doesn’t always go to AP.) You say, ‘Yeah in two weeks there’s this invoice and there are three invoices behind that one.’ So, I say, ‘Let’s take a look at them while we’ve got you on the phone.’”
Instead of hanging up after fixing one invoice, you address these other invoices in the same call.
“Now how does the vendor feel when we end the call?” Bicking asks. “Like: ‘Wow, she really cares about our relationship.’ We didn’t just take care of that one invoice, we took care of the four in the queue, which by the way, would have most likely been paid late!”
Broader picture, better relations
“By putting the importance not on the particular inquiry but the relationship, customer service looks at the broader picture, anticipating problems. And it begins to solve underlying problems. That broader approach not only resolves one call; by determining and fixing the cause it eliminates future calls while strengthening the supplier relationship.”
AP’s vendor interactions offer visibility into the problems to address. AP customer service has the opportunity to work with the vendor not just to fix the issue at hand, but to fix the underlying process and enhance vendor relations at the same time. That attention will result in improved processing for all of that vendor’s invoices and perhaps the invoices of others. And that’s good customer service.
To learn how InvoiceInfo can help you provide great vendor service while freeing your staff, contact us.