The issue of late payments reared its ugly head recently between Airbus and Lufthansa. Reports indicate that the issue surrounds contractual disagreements and struggles down the supply chain.
Reportedly, Airbus is withholding deliveries of A330 passenger jets to Chinese conglomerate HNA Group, claiming its customer is late on payments. According to one source quoted in the Financial Times: “There are problems with finance. But we are talking and there is progress.”
Airbus and Boeing are reportedly struggling with their own supplier issues. Reports said the supply chain struggles are also causing payment delays for the companies, with customer agreements requiring payment upon delivery. Boeing CEO Dennis Muilenburg says supplier issues are “on all of our radars every day.”
Accounts Payable operations are plagued by an endless stream of supplier requests for payment status and account maintenance. The result is a significant drain on available resources, strained vendor relations, increased operational costs and missed early-pay discounts. This is because supplier enablement solutions today are not fundamentally connected to invoice automation and dynamic discounting solutions.
What’s needed is a more innovative and comprehensive approach to accounts payable and supplier enablement. This approach — “Total AP Automation” — seamlessly blends invoice automation, payment automation, dynamic discounting and self-service supplier enablement. This approach drives immediate and dramatic reductions in supplier support and related costs by giving suppliers an easy to use self-service portal. This approach allows instant visibility of invoices status, payments and POs. In addition, the inherent advanced automation accelerates invoice processing ,maximizes early pay discounts, and ensure vendors are paid on time (or earlier to maximize early-pay discounts) and via the method most advantageous to the buyers.
This provides a win-win for both sides of the P2P value chain by delivering the fastest payments to suppliers, while maximizing early-pay discounts received by customers—capturing up to 2% of corporate spend directly back to the bottom line and enabling organizations to optimize cash
management in real-time.