Role Of Accounts Payable In Supplier Management Relationship

Relationship management with your suppliers is crucial to running a successful business. Building solid relationships based on trust, openness, and mutual benefit should be a top concern because you depend on your suppliers to satisfy your demands and keep your business running efficiently. While there are established methods for forging these enduring connections, accounts payable process is crucial for preserving a strong bond with your suppliers.

What is supplier management?

The practice of rating and prioritizing suppliers according to their overall significance or value to a business is known as supplier relationship management (SRM). SRM is fairly simple for small organizations with limited supplier relationships. However, it becomes essential to be more systematic for companies whose supply networks are extensive and expanding.

With each provider, the depth or engagement may differ. Sometimes, the connection between the parties is purely commercial—that of a buyer and a seller. In other situations, the partnership might develop into a strategic alliance where the buyer and seller work together to achieve shared objectives.

Why does accounts payable process matters in supplier management?

A vendor relationship is established when a vendor is chosen, and onboarding is finished.

The accounts payable process department is crucial to preserving a positive supplier connection, even when the procurement department may exert all its efforts to foster it.

If your company produces things for sale, you already understand how crucial a solid vendor or supplier connection is to your company’s success and why developing and keeping a great relationship with them is crucial.

For example, it gets much more challenging to make those wood desks for sale if your supplier ceases supplying wood to your company owing to non-payment.

However, the same holds true for essential support services that assist you in delivering your goods or services.

Despite the clear link between successful supplier relationships and company outcomes, the significance of these relationships is sometimes downplayed or completely ignored.

Due to this disdain, shipment delays and price discrepancies may quickly lead to your supplier rejecting to do business with you.

Businesses don’t purposefully develop a negative rapport with their suppliers.

Poor accounts payable process often lead to the gradual destruction of supplier relationships.

Factors Affecting Supplier Relationship Management


Most successful business relationships are built on a foundation of trust, and every business partner must uphold that trust based on the company’s standing, dependability, and awareness. It is one of the key elements that will determine how the future of the partnership between the buyer and the supplier will play out. The most effective communication plan currently in use is based on mutual trust.


Commitment is another important element in developing a successful buyer-supplier relationship. Business partners have a shared commitment to sustain their current relationships for the long term. The level of commitment guarantees complete confidence and demonstrates to both parties the readiness of each organization to put forth as much effort as possible.


A clean reputation is key to developing a communication plan between partners. In supply chains, the supplier’s reputation may be the primary determining factor for the buyers. It frequently becomes the main selection criterion when choosing a business partner because it may impact all parties.


Communication is one of the building blocks of the buyer-supplier relationship. It is well known that effective communication is essential to any productive working relationship, particularly in the business world. The buyer and provider must have strong communication skills and mutual understanding to establish a successful business relationship.


A strong communication plan between the supplier and the customer may establish the tone for the entire long-term partnership. As a result, a supplier must carefully evaluate the situation and plan a great strategy to develop a long-term partnership with the buyer.


The cooperation needs to be based on shared objectives. When there is effective communication, shared needs and interdependencies are the foundation for common goals. Moreover, a lasting partnership is made possible by common objectives. Shared objectives and goals must be established to collaborate with any client successfully. Instead of concentrating on present quality and cost, supplier development initiatives should concentrate on future capabilities in technology and product development.


For any organization, building a solid relationship with suppliers is essential. Businesses can earn a competitive edge over rivals by maintaining positive supplier relationships. It is essential for increasing a company’s productivity, cutting expenses, and raising the standard of goods and services. Businesses can acquire a competitive edge and succeed long-term in their supply chain operations by allocating resources to SRM. 



The author Mattie