Why Keeping Your Vendors Happy is So Easy... and So Important // 09.29.2008 at 10:35 AM

Categories: Leadership and Influence, Quality of Work Life

I was having a nice conversation with a friend of mine last night, and things invariably turned to office frustrations. She works for a VERY large company (I'll leave the name confidential... I wouldn't want to get anyone in trouble) and was bemoaning the fact that their massive accounts payable department can never seem to pay their vendors on time, which creates embarassing situations for her, and sometimes ruins her vendor relationships. Being a small business co-owner myself, I have been on the receiving end of those "lost" payments, and I also understand how important my own relationships with our vendors are to our business.

I listened as my friend described the yards upon yards of red tape she had to navigate just to open a purchase order to get the whole payment process started. Then, she said, it seemed that it was always the little guys - the freelancers, small businesses, and the like - who didn't get paid on time, had their payments denied for one strange internal reason or another, and always for very small amounts. I have to admit, that gets my goat too; I once spent 16 total hours trying to collect payment for 2.5 hours of work performed.

All this red tape and lack of support makes my friend's job more difficult. Her company's internal issues are seemingly beyond her control - but since she is the point of contact for her vendors, she's the one who looks bad when they have any issues with her company. She is forced to spend extra hours sorting out the mess and repairing the damage with her vendors - and if a vendor fires her as a client, she loses a valuable resource and spends even more hours trying to replace that resource. When she is able to mend the relationship, her vendors are sometimes still wary and she finds that they are no longer as willing to jump in when she has an emergency and needs something at the last minute. Who knows how many hours she has had to spend doing damage control in addition to her regular duties.

Our conversation brought something very important to my attention: not everyone in your company understands how important vendor relationships are. I know that if I pay my vendors right when I receive their invoices, give praise when praise is due, and treat people with respect, that I receive the best service that they can give to me. And as a service provider myself, I will go above and beyond for those special few clients who pay us on time and say please and thank you. The fact that they appreciate us makes everyone here want to help them even more... and that's really all it takes! And if I have a client that has an excellent payment track record, I'm more inclined to offer them payment options when they need it most. There's no incentive to bump honest-paying work for someone who might not pay their bills in the end.

I realize that I'm one of the lucky few; I have the power to make sure that our vendor relationships are strong and well-maintained. It's something that I really believe in so I make sure to stay involved. My business has a strong network because of it and I firmly believe in my "team". But what about my friend? She's just another employee in a sea of faceless employees. How can she initiate the changes that can turn her employer into a company that good vendors want to do business with? As I said to my friend last night, I wish I had an easy answer. There's good software out there that can reduce the paper trail and facilitate the vendor payment process, but for a large company a change like that can be a major undertaking - and one lone employee's suggestion is not going to initiate such a large undertaking. Maybe if everyone down the chain of workers understood the importance of treating people right and taking care of vendor relationships, employees like my friend would have the internal support they need to maintain their good vendor relationships.

I'd love to hear what anyone else has to say - how does one person start that change for the better? Do we plug away and slowly spread the word, or is there something more than can be done by any employee at any level? For my part, I'm going to keep telling everyone I know to build and keep these good relationships - and I'm going to continue to practice what I preach.