Gain a Competitive Edge: Pay With SpeedWhen 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 disgruntled contractors 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 .They will favor organizations that consistently provide correct, timely, and hassle-free payment. An organization that insists its contingent workforce be paid quickly and efficiently will gain the goodwill of contractors and suppliers - which can lead to hard-line advantages.
Slow Pay: A Faulty SolutionSome organization use MSPs or VMS solutions with manual systems that are slow and inefficient. Others 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. When suppliers experience the consequences of these 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 prevent a business from gaining access to a quality talent pool offered by local, small, and diverse suppliers. These suppliers generally don't have as much cash larger firms and may not be able to maintain their balance sheets if payment periods stretch on. An MSP that delivers prompt payments 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 MSPWhen 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 SolutionIf an organization does not use an MSP to manage their contingent workforce and 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 payable systems or even with the bank for streamlined distribution of payments.
A slow payment chain often leads to aggravation, frayed working relationships, and fewer opportunities when dissatisfied contractors and suppliers favor other organizations. One of the most detrimental effects of slow paying invoices is that it undermines an organization's ability to attract and secure the best candidates. 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.