Why spend more money for your accounts payable vendor invoices than you have to? Maximizing cash flow can be done in many ways, and one of the easiest ways to stretch your capital is to make the most of vendor discounts. We have put together five ways you can work with your accounts payable vendors and suppliers to optimize your spend and access lower costs.
1. Pay Early
Most vendors offer an early payment discount incentive. Sometimes this discount will be as standard as ‘2/10 Net 30’, while some will have incentives for quick cash payments. Make the most of these early pay discounts by monitoring your payables invoices.
2. Increase the Volume Purchased
We all see it every day, from canned goods at the grocery store to large scale suppliers. Volume vendor discounts give buyers access to a lower purchase price, and these savings can often be passed down the line. Consider evaluating your forecasts when making inventory purchases for a full quarter (or longer) rather than just monthly quantities. Many vendors offer volume discounts or end-of-year rebates that can benefit your business. Lower your total spend, and even pass the savings along to your customer. It’s a win-win for everyone!
3. Extend Your Contract
Customer loyalty is often rewarded. Organizations, vendors, and suppliers may offer rebates, price lock guarantees or special offers that could include free product. When it comes time for contract renewals, ask your account manager if there are incentives to renew or extend the contract.
4. Check Your Membership Benefits
American Express said it best: “Membership has its privileges.” Is your business a member of an organization, club, or association? Check with your organization to see if you qualify for any offers like preferential pricing that might be available only to members.
5. Pay with Virtual Credit Card
Paying with a credit card is becoming more and more widely accepted as forms of payment for vendors and suppliers. Virtual Credit Cards programs can actually make money while paying your accounts payable invoices and overhead expense bills through rebates. Yes, you read that correctly: make money by spending money. Or, spend less money overall. No matter how you look at it, your organization reduces its bottom line.
Using a full procure-to-pay AP automation solution will help you take full advantage of early pay discounts, and make cash-flow management much easier so that you can make better purchasing decisions. Let us show you how by booking a demo with an AP specialist.