As the world of business continues to change on a global scale, suppliers are contending with the pressures of voluminous and complex purchasing processes alongside an increasingly demanding customer base.
Suppliers have been forced to adapt their trade management practices in order to ensure that they are able to keep up with the expectations of their customers. However, these integrated and often complex trade account management practices have introduced numerous challenges for suppliers.
Over-complicated and outdated trade management practices are no longer supportive in today’s modern era.
As a result, many suppliers are now struggling to find an adequate solution to manage the accounts that can not only satisfy customer demands, but also require less labour and administration, whilst ensuring they provide excellent customer service at all times.
Suppliers feel the pressure in only 12 months
In late 2021, a survey* with 200 senior IT and business decision-makers at supplier organisations and 400 business decision-makers at buyer organisations were conducted. The survey involved analysing the management of supplier trade accounts and how they affected business processes and buyer-supplier relationships. Remarkably, the survey discovered that suppliers have experienced significant pressure from the ever-increasing demands on account management processes – even in just a small time period of 12 months. And it’s only getting worse.
Incredibly, close to half of all suppliers surveyed reported that their trade account management costs have increased dramatically. The same suppliers indicated that costs had increased by an average of 21%. The reason: inefficient trade management practices that required manual or labour-intensive processes to maintain the status quo.
Late payments are a growing issue
Compounding these issues was that almost 40% of suppliers reported an increase in the amount of time taken to receive payments in the 12-month surveyed period. Close to half of all suppliers indicated an average day sales outstanding (DSO) of more than 30 days over the 12-month period. Payment terms are stretching out, and when they aren’t, late payments are a growing issue, representing a significant risk to suppliers’ bottom line.
In response, suppliers used manual reconciliation processes and manual reminders in an attempt to recover those late payments. Of course, manual reconciliation processes are costly, and not surprisingly, suppliers reported an average cost of failed payment recovery close to a quarter (22%) of the average payment size. Again, these in-house labour-intensive practices are causing a significant cost and impacting the suppliers’ bottom line.
Buyer behaviours are impacted
Not only are these practices affecting suppliers, but they are also impacting buyer behaviours. Buyers are reporting an average of 11 FTEs spending an average of 15 hours per week managing suppliers at their organisation. This represents a significant resource burden for buyers’ organisations, slowing buyer business and increasing their costs. Distracting buyers from their core business and placing administrative demands on the buyer during the purchasing process ultimately impacts supplier business.
On average, 7% of buyers with failed payments at supplier organisations churned – meaning they stopped buying from the supplier. This is a significant loss to a supplier since it represents not only lost revenue but also a loss of brand loyalty and confidence.
Opypro is the smart way to manage your trade accounts
Opypro is a Software as a Service solution (SaaS) that helps suppliers reduce manual processes, while providing a more efficient way to manage business accounts. Opypro is fast, automated and intelligent and it allows companies to manage their trade accounts end-to-end, including invoicing and automated reconciliation. It’s one platform with everything you need to scale and grow.
Are you ready to take your trade account management to the next level? Don’t get left behind, learn more about how Opypro can help your business today.
*“Reimagine Buyer Account Management: Modernize Account Management Practices To Boost Your Bottom Line” A Forrester Consulting Thought Leadership Paper Commissioned by Openpay, December 2021