The One Secret To A Competitive Edge In A Crowded MarketLanding the best talent requires establishing a reputation as an organization that creates a better work experience for its contractors. If that sounds easier said than done, know there's a surprisingly simple strategy to accomplish this through a trickle-down effect that begins with your invoicing process. This one trick can lead to better service from suppliers, increased contracts, and access to a better pool of talent.
Gain a Competitive Edge: Pay With Speed
When it comes to paying contingent labor for services, different organizations (either working with a Managed Service Provider or Vendor Management Software) have different policies on when and how they pay. When the organization is slow to pay the supplier, the supplier may be delayed in paying the contractor. Some contractors can find themselves waiting longer than the invoice payment terms to receive payment for their work.
It may seem simple or trivial, but issues with pay can be some of the most frustrating challenges for suppliers; so much so that they will favor organizations that consistently provide correct, timely, and hassle-free payment. An organization that insists that its contigent workforce be paid quickly and efficiently will gain the goodwill of contractors and suppliers - which can lead to hardline advantages, such as access to better local talent.
Slow Pay: A Faulty Solution
Some organization use MSPs or VMS solutions with manual systems that are slow and inefficient. Other MSPs and organizations have a corporate policy to maintain higher levels of liquidity. In both cases, they ask suppliers to wait for payments, taking 30 or more days to pay. But slow-pay MSPs and companies, regardless of the reason, send the wrong message to their suppliers. When suppliers experience added challenges from slow-pay organizations, such as aggravated contractors, written complaints, and reduced capacity, they're unlikely to send top talent to the businesses that create those hurdles.
Prolonged payment periods can also preclude a business from gaining access to a quality talent pool offered by local, small, and diverse suppliers. These suppliers generally don't have the cash flow as larger firms and may not be able to maintain their balance sheets if payment periods stretch on longer than necessary. An MSP that delivers prompt payment brings these suppliers and their talent pool into the fold - giving businesses a better chance of finding the perfect contractor for the job.
Make The Switch To Speed With an MSP
When an organization is vetting MSPs, do not underestimate the importance of an MSP's accounts receivable/payable processes: be sure to ask about their policies and system before hiring them. Moreover, it is critical to verify that the MSP personnel understand the palpable impact of slow paying an invoice throughout their entire supply chain and how their procedures can affect the organization's reputation long-term.
Streamline Payment Distribution With A VMS Solution
If an organization does not use an MSP to manage their contingent workforce, but instead uses a VMS solution, the power to change the efficiency of the accounts payable process rests in the hands of the leadership staff. HR managers should approach the leadership team and detail the advantages of updating the payment distribution process - and the potential consequences of leaving an outmoded system in place. Ideally, the VMS is integrated with the payables systems or even the bank for streamlined distribution of payments.
A slow payment chain often leads to aggravation, frayed working relationships and fewer opportunities if dissatisfied contractors and suppliers favor other organizations. Perhaps the most detrimental effect of slow paying invoices is that it ultimately undermines an organization's ability to attract and secure the best candidates. Thankfully, organizations can avoid these unnecessary challenges by consulting their MSP or updating their VMS software to ensure their suppliers are paid accurately and rapidly. This simple solution improves relationships with suppliers and with contractors - and can earn an organization a reputation as the place to work.