There is hardly an aspect of business untouched by the COVID-19 pandemic, whether you operate locally or globally. While in many ways the COVID-19 pandemic seems to be on the decline, the relatively recent Sunbelt spikes show it’s an unpredictable situation. It’s led many businesses to change how they do things in drastic ways, such as having all their employees work from home. There have undoubtedly been hiccups along the way, and businesses are working to find new, effective pathways to get things done and remain productive. You may also be experiencing disruptions with your vendors and suppliers. This could be on your end. For example, maybe you’re facing hurdles with your employees working remotely that you’re trying to get through, or perhaps you don’t have the cash flow you did previously, so you’re worried about how to handle suppliers in that sense. On the other side of the situation, suppliers may be dealing with their own issues that could be causing you disruption.
The following are things to note right now as far as managing vendor and supplier relationships during COVID-19 and beyond when we could be looking at the new normal as it’s often referred to.
Implement AP Automation
There can be benefits of having employees work remotely, and you may find that once you get everything going smoothly, your organization is more productive. As far as general productivity as well as effective vendor relationship management, make sure you have an AP automation solution in place. This is going to help you with centralized visibility, even when your workforce is dispersed. With AP automation, your team will have improved analytics so they can more effectively manage vendor relationships. AP will be able to show the finance department where late payments are happening and what the bottlenecks are that are slowing down vendor payments. It’ll be a way to see which vendor relationships could need attention as well.
Any way that you can improve how things are moving along during COVID-19 is likely to improve vendor relationships.
Audit Your Supplier Relationships
If you haven’t done so already, it’s a good time to assess all of your vendor relationships, and how they affect your business. Then, once you’ve got a broad overview, start organizing them based on how critical they are to you. Which vendors are of critical importance to the continuity of your business? Which vendors are the most expensive for your organization? Once you’ve detailed these things, start outlining things such as what your vendor risk mitigation plans are. Plans should allow you to provide coverage across supplier areas, but you should also be able to drill down more specifically into areas of high-risk.
You want to make sure you have a clear picture of the vendors that are most likely to interrupt your business so you can focus your attention where it needs to be.
Have a Conversation About Your Concerns
You should speak to vendors and suppliers about any concerns you may have, and do so proactively. It looks like the specific outlook may ebb and flow, COVID-19 is here to stay for the foreseeable future. You need to talk to your suppliers about how they expect this to affect their business, and ask what their business continuity plan is. You may be just trying to get a general idea of any issues your supplier feels they could have, but you could also be dealing with contractual issues that have already happened. Either way, we’re in a time when empathy is important because, again, everyone is feeling the effects of coronavirus. If you need to discuss an issue with your supplier, be direct and honest, and let them know that your ultimate goal is to find a mutually acceptable resolution. You might want to have some resolution options ready when the time comes. Present them only after you’ve thoroughly considered the implications that may affect both parties. Take a similar approach if the problems are on your end, and you’re having trouble paying. Your vendors will ultimately remember how you treated them, and you responded during these difficult times. You may also find that your vendors, including your cloud vendors and software vendors, are already offering adjustments to contract terms or offering special deals based on the situation we’re facing currently, so do your research if you anticipate a problem could occur on your end.
When it comes to your cloud and software vendors, make sure you’re clear on what their business continuity plans are for critical systems. This was touched on above, and you should after doing an audit of vendors and suppliers, have a good idea of what’s mission-critical for you. You need to ensure your vendors have plans in place and safeguards to prevent significant downtime. The idea of having proactive conversations with vendors was mentioned above, and you should specifically ask your cloud and software vendors whether they have any limitations you should be aware of that could reduce their ability to deliver services to your business. You also want to think about what’s happening in the present, but also what could happen down the road. For example, could there be more effects felt in 90 days if the coronavirus continues to have the impact it’s having now?
For software vendors, another point of conversation to address is how they’re dealing with cybersecurity issues specific to COVID-19 and what they’re doing to keep infrastructures safe if their employees are working from home.
Safety Measures for Physical Suppliers
If you have businesses supplying you with physical materials, you should talk with them about your strategies for keeping their employees safe. Have a specific plan that you share with them, such as no-contact delivery. You want to show that you value your suppliers’ employees so that you can continue to build your relationship.
It’s a tough time for all businesses, but you want your vendors and suppliers to remember how you managed relationships in times of adversity.