- Buyers have more incentive to participate in the action as they are learning that some suppliers are needing faster payments. They now see it as a profit center when they realize suppliers are willing to give up a discount through either setting up an account with a factoring company or offer 2% or 3 % off for early payment from the buyer.
- Buyers no longer want to be sending payments to a third party and prefer to make out the payments to vendors directly.
- Buyers are annoyed by invoice factoring companies calling for verifications of the invoice and have to keep up with notice of assignments. Sometimes leading to legal issues due to payments going to the vendor instead of the factoring company.
Why do trade payable platforms fail or are not used after implementation?
It's all about ease of use, short setup cycle and 100% vendor approval without waiting on a network to process documentation.
There are many trade payable finance companies in the market to choose from. The reality is buyers need an easy process to apply, easy method to approve vendors, and a fast and flexible system for the internal staff to learn the process. If the system is too difficult for the accounts payable department to track and pay suppliers with additional work and multiple processes, it will fail. If the system requires a 50+ page document for the suppliers to sign up for the program, it will fail. The main focus is to maintain very few steps for the supplier to submit an invoice and the payables department to approve, authorize to pay and track.
If the system is too complicated, or the buyer has to hire and payout an IT company to setup API integration in order to communicate with the trade payable service provider. These obstacles should not exist and will discourage buyers from continuing the implementation process the leads to a complete halt.
1st Commercial Credit makes it very simple with no software cost or integration needed.