Part 12 and final blog of the Payments and Cash Flow Series.
You’re up and running, with suppliers coming on board and financial benefits beginning to roll in – but you’re not resting on your laurels. Instead, always focus on future growth.
Here are four steps you can take to drive even greater results:
- Address previously excluded spending and suppliers. In payment or working capital programs where you need to engage and collaborate with suppliers, you will typically work with suppliers in batches. Similarly, you may begin outreach to groups that are traditionally more accepting of your goals. For example, supplier categories like janitorial services, facilities maintenance providers, and MRO (maintenance, repair, & operations) suppliers historically accept discount terms more often than others. Just because certain supplier categories are out of scope to begin with doesn’t mean they should be excluded permanently.
- Revisit suppliers that declined or had existing contracts. A supplier with a net 30 contract may be less likely to see the value of early payment than a supplier recently moved to net 90. Track existing contracts and declines, following up three to six months later when the perceived benefit of getting paid on day 10 may be much greater.
- Reengage with suppliers that extended terms but were not interested in earlier payment. Like the last group, some suppliers may accept a move to net 90 without seeing an immediate need for early payment. When you revisit them later, circumstances may very well be different.
- Incorporate net new suppliers from day one. Any standard net term that you implement during outreach should be applied not just in this program, but to all net-new suppliers as well. The same goes for the set of defined discount terms that you offer during outreach. Make these available up front to new suppliers and grow your working capital savings from another angle.
Call to action
Work with your provider to plan ahead. You should always be looking for new avenues of program growth. The right time to conduct analysis and plan for the next wave isn’t when the current outreach is complete; it should happen in parallel. This ensures a smooth transition between phases with minimal downtime.
Gather feedback on expanding the scope of the program. The execution phase of each wave gives you the opportunity to hear from suppliers about what is attractive and what is not. Use this insight to inform future waves – and to address issues you’ve uncovered before they pop up again. If you’ve kept your sponsor and executive management informed about program success, you may uncover an opportunity to expand the program to new supplier groups, spend categories, or geographies that were not initially in scope.
How we can help
To help you plan for program growth, we offer a sample wave planning and analysis worksheet that shows how you might implement a prioritization approach and timeline for supplier outreach and onboarding. You can request it by sending an email to SAP_improvefirstname.lastname@example.org.
You can also get our complimentary Insider’s Guide to Improving Payments and Cash Flow e-book. You’ll learn how to build a business case for improving payment processing and cash flow management, and determine core requirements for a successful program that will deliver measurable value to your organization.