Finding a reliable and competitively-priced supplier is vital to the success of your business. Good businesses practices are always a two way street, and your business relationships will flourish if you make it a habit to treat your suppliers with consideration and respect. It’s easy to fall behind on supplier payments when there are so many other ways to disperse funds within the business. Often, we find that clients enlist our help to pay down some of these outstanding balances.
With a flexible daily repayment percentage, a merchant advance is an ideal way to secure that extra cash without taking the profit away from the business. Long-term supplier relationship management is crucial to the prosperity of your business.
Consider some of the following when working with your suppliers:
1. Meet your contacts face-to-face and see how their business operates. Understanding how your supplier works gives you a better sense of how it can benefit your business.
2. Meet the people who’ll be managing your account and make sure they can be easily contacted.
3. Ask about their plans for development or expansion. Will this affect the goods or services they’re providing to you?
4. Help your suppliers by placing orders in good time, being clear about deadlines and paying on time. See the page in this guide on how you can help your key suppliers.
5. Keep an eye open for any opportunities you can pass their way -in a good customer-supplier relationship they’ll do the same for you.
6. Make your business important to your suppliers and they will work harder for you. Some suppliers may offer better deals if you promise to use them exclusively.
Remember, the relationship is a two-way street. Providing positive references and referring business to your suppliers is something they’ll appreciate – and will more than likely return the favor. Keep them in mind by being courteous; and mindful of the following:
1. Co-ordinate your production schedule with theirs.
2. Discuss ways to reduce overall costs through size or timing of orders/contracts.
3. Consider additional products or services that your supplier could provide.
4. Update them on strategic changes or new products early on – this helps them adapt to meet those changes.
5. Analyse how well you forecast sales and plan to meet your supply needs.
6. Use a purchase order system to control and monitor the buying of goods and services from suppliers – this facilitates internal financial controls and prevents specification misunderstandings
7. Pay bills promptly. Paying late will strain your relationship with the supplier and could lead to less favourable terms in future.
8. Have a payment policy that commits your business to paying undisputed bills on time – a copy should be sent to your suppliers.