How clean supplier data improves supplier relationships

Why supplier relationships matter in Accounts Payable

We know why it’s important for an organisation to create trust and consistency with its suppliers. They supply the goods and services required for it to run. Not only that, but suppliers are carefully sourced, vetted for quality, timeliness, and price – a good supplier is worth their weight in gold.

So, Accounts Payable isn’t the first place you would think holds a lot of weight with suppliers. The truth is actually that it could be the most important. Procurement and purchasing might onboard and place orders, and others might work with them to complete the legal aspect. But day-to-day, Accounts Payable deal with the element that is most crucial to their operation – whether they get paid.

But there’s a difficult balance between fielding supplier queries, updating them, and managing finance strategy, payments, and compliance controls.

This blog explores the impact of supplier data quality and gives recommendations on how to balance those spinning plates.

The hidden cost of dirty supplier data

So, why does data quality impact your suppliers? It’s simple, really. Unclean data, such as duplicates and outdated details, causes errors and delays in your payables process. The knock-on effects of this? Duplicate suppliers often lead to incorrect payments. If the AP team miss this, suppliers will chase up. Outdated details can cause AP teams to pay incorrect suppliers, resulting in the same issues.

Once the supplier complains or the error is caught, it takes more time to complete the process. Your own investigation into why the payment was incorrect, the work to fix that error, and make a new payment, all add up.

Supplier friction: From late payments to lost trust

Repeated disputes begin to damage your relationship and hurt collaboration with your supplier. You will not be eligible for early payment discounts. Enough delayed payments soon erode trust in your ability to pay on time, and with that comes consequences. Someone who proves untrustworthy can see their supply deprioritised or even stopped. Organisations can find themselves scrambling to find a new supplier for essential goods when this happens. If the supplier is small, the Small Business Commissioner can intervene, impacting reputation. In turn other small businesses may think twice before choosing to work with that organisation.

Real-world impacts for AP teams

Let’s dive into how dirty supplier data truly impacts your team, not only the supplier. Data issues in the supplier file cause risks on many levels.

We’ve mentioned messy data results in inaccurate payments. The effects for your team? Recurring invoice queries, supplier calls, disputes, and payment recoveries that put strain on their time.

This impacts their ability to complete daily tasks effectively and gives very little time to add value. Duplicate and dormant suppliers can easily be utilised by fraudsters. And with the ‘Failure to Prevent Fraud’ offence, not looking after this area could put your organisation at risk of fines.

And let’s not forget the audit. Because if you know your supplier file is a mess, you and your team will be scrambling to tidy it up beforehand, leading to inefficiencies in other areas.

This is all preventable.

Clean data, confident payments

Did you know that on average, supplier file issues cost organisations around £470k per year? That’s a lot of capital leaking away from your organisation.

You know how to stop it. It’s all to do with controls – thorough, methodical controls.

Now, we don’t expect you to ask staff to comb through the supplier file every week. We recommend automating the process to make it as quick and seamless as possible. The result: Instead of your team finding an issue, investigating, and then changing the supplier file when a payment needs to be made, this process happens before the invoice ever comes in.

That’s accurate payments, to the right supplier, at the right time. Reduced disputes and fewer urgent escalations. Less stress for your team and confidence during audits, without a last-minute tidy up.

From compliance to competitive advantage

Proactive supplier data maintenance goes even beyond payment confidence and audit readiness. It’s a performance enabler that will improve efficiency, reducing processing costs. Accurate, on-time payments mean fewer recovery expenses and less time spent on recoveries, fewer late payment fees, and a strengthened supplier experience.