A strong knowledge of payment terms can help any organization better manage its accounts payable processes. If a company is unaware of when vendors must be paid, it’s possible for negative outcomes to arise, weakening its bottom line and reputation.
According to the Accounts Payable Network, accounts payable plays an important role in keeping relationships with vendors their debts to vendors early, but during a downturn, payment terms may need to be extended.
Karl Andersson, CEO of Tech Insight, explained that above all else, companies must be aware of what their payment terms actually are. But the reason for this is not purely related to the relationship with a vendor. Andersson emphasized that mismanaged payment terms often lead to enterprises needing to invest in extra support to rectify issues with unhappy vendors. Additionally, costly mistakes such as duplicate payments may occur more often.
To learn more, download Tech Insight’s whitepaper, Payment Terms, Friend or Foe?