The secret to a resilient supply chain: treat your vendors like customers

What if we obsessed over vendor experience the same way we obsess over customer experience?

We map buyer journeys, measure Net Promoter Score (NPS), and pore over touchpoints because we know that even small improvements in customer satisfaction have a big impact on loyalty and retention.

Unless there’s a crisis or complaint, we rarely pay the same attention to vendor experience. Why? Because we’re paying them, not the other way around. And we often feel there’s more opportunity with the people buying from us.

But the contractors, freelancers, and suppliers you pay are just as critical to how your business runs as the customers keeping it alive. The quality of what you deliver and how reliably you deliver it depends on them. And that means how you treat them ultimately shapes what your customers experience.

Payment is one of the most frequent interactions you have with your vendors and contractors, and one of the most overlooked opportunities to create a better vendor experience (VX). In this article, we look at what a more intentional approach to accounts payable (AP) can do for the people your business depends on.

Your AP process is already sending a signal to your vendorsYour AP process is already sending a signal to your vendors

Search for advice on improving your accounts payable process, and you’ll find plenty on how to automate your workflows, cut processing costs, and improve your own cash flow. It’s all good advice, and it’s all written from the same perspective: yours as the payer. The vendor’s experience barely gets a mention.

That’s not because business owners don’t care about their suppliers and contractors. Of course, you want to keep them happy. It’s just rarely the thing that shapes how the process is set up.

So let’s consider what it looks like from your vendor’s side:

• They send an invoice and wait
• If payment runs on your schedule, not theirs, they adjust
• If it arrives late, they follow up
• If funds land without clear information about which invoice they cover, someone on their team has to figure it out
• If the payment method creates extra steps, they absorb the inconvenience

These may feel like small frustrations or just the cost of doing business. But they compound. According to the Ardent Partners AP Metrics that Matter 2025, AP teams spend 21.8% of staff time managing supplier inquiries – more than a fifth of total capacity absorbed by questions that a better payment process would prevent. 

Over time, vendors factor that effort into how they think about working with you. When capacity is tight and they have to make decisions about who gets priority, the businesses that create the least friction tend to rise to the top. The ones that don’t can find themselves pushed to the back of the line.

Instead, you could be the business that earns preferred customer status with its suppliers. That could mean faster turnaround times, more flexibility when there are hiccups, and a greater willingness to go the extra mile when you need it most.

How a vendor-first approach to payments builds supply chain resilience

Think about what it would mean to give your vendors and contractors genuine visibility and control over their own cash flow. Not just the reassurance that payment is coming, but the ability to make real decisions about it. Where paying on time and being predictable is just the baseline.

A vendor-first approach to accounts payable is built on four principles:

Choice. Vendors and contractors have different preferences for how they receive payment. A vendor-first approach gives them that choice without creating extra work for you. The way you fund a payment and the way your vendor receives it are two separate decisions. The shift toward digital is accelerating: Nacha reported that B2B ACH payment volume grew 9.4% year over year in Q1 2026, with Same Day ACH surging 23.6% – yet many vendors still receive checks by default.

Transparency. Vendors should know what a payment is for without having to ask, and when to expect it. Clear remittance details and payment notifications remove the need for follow-up on both sides. 

Speed flexibility. Cash flow pressures are real on both sides of a payment. A vendor-first approach gives both payer and vendor options around timing: the ability to pay strategically on your end, and the ability to expedite on theirs.

Consistency. A predictable payment experience builds confidence over time. When vendors can track incoming payments and know what to expect, the relationship feels stable and professional, even when nothing is being said.

When these principles are in place, AP stops being a transaction and starts functioning as relationship infrastructure. The shift is less about the tools you use and more about whose experience you are designing for. Start with your vendor in mind, and Melio gives you everything you need to deliver on that.

What vendor-first payments look like in practice

Are you giving your vendors a choice in how they get paid?

In Melio, how you fund a payment and how your vendor receives it are two separate decisions. Your vendor can choose ACH, check, or another available method, and payments arrive with invoice details so they immediately know what the payment covers. No guesswork or follow-up needed.

Are you giving your vendors control over when they get paid?

When you schedule a payment, your vendor receives a notification with an estimated payment date. If they need funds sooner, they can choose to expedite at their own cost, without involving you or changing your workflow. They get control over their cash flow. You get one less thing to manage.

From where your vendor is standing, the experience of being paid by you is noticeably better than most of the businesses they work with. Think of the difference between standard good customer service versus customer excellence – but on the payable side of your business.

Your vendor payment process is your reputation – make it work for you

Vendors aren’t likely to blame software when receiving payments feels clunky. They attribute that experience to the business paying them poorly. That means there’s an opportunity not just to avoid friction, but to genuinely stand out – because your vendors and contractors don’t expect this to be an area where they get much say. The bar is low, and you have the power to considerably raise it.

Accounts payable can become more than just the process of moving money. It can be the foundation of your vendor experience – a clear, reliable point in your brand where vendors get real visibility, choice, and control.

You can’t always control what happens in your supply chain. But the relationships you have with the people in it are one of the few things you can. And those relationships are built in these seemingly ordinary and unglamorous processes. Small, 1% improvements in the places no one is looking can still be the ones everyone notices.

Ready to transform your accounts payable into relationship infrastructure? Start using Melio to give your vendors the choice, transparency, and flexibility they deserve.

Vendor payments FAQs

Why does the vendor payment experience affect supply chain resilience?

Because vendors make capacity decisions. When they’re stretched and have to choose which clients to prioritize, the businesses that create the least friction rise to the top. Late payments, unclear remittances, and rigid payment methods all add up to a vendor experience that quietly deprioritizes you. Supply chain resilience isn’t just about contracts and diversification. It’s built in the ordinary, repeated interactions that either earn goodwill or erode it.

What does a vendor-first accounts payable process actually look like?

It means designing your AP process around your vendor’s experience, not just your own operational convenience. In practice: giving vendors a choice in how they receive payment, sending clear remittance information so they don’t have to follow up, communicating payment dates proactively, and building in flexibility so vendors can expedite if they need to – without that creating extra work for you.

Can I give vendors a better payment experience without hurting my own cash flow?

Yes – and this is one of the most important things to understand about vendor-first AP. How you fund a payment and how your vendor receives it are two separate decisions. You can pay on your own schedule using a method that works for your cash flow, while your vendor receives payment in the way that works best for them. You’re not trading your financial flexibility for theirs.

What do I need to know about 1099 requirements for vendor payments?

If you pay a vendor $600 or more in a calendar year for services, the IRS requires you to file a Form 1099-NEC reporting that payment. This applies to individuals, partnerships, and some corporations. You’ll need a completed W-9 from each vendor before payment to capture their tax ID. Keeping vendor records organized in your payment platform from the start makes this significantly easier at year-end.

What is preferred customer status with suppliers and how do you earn it?

Preferred customer status is informal, but it’s real. It’s the position you earn with suppliers when working with you is consistently easier than working with your competitors. That means paying on time, communicating clearly, giving vendors flexibility, and reducing the admin burden on their side. When a supplier has to make a call about who gets prioritized, preferred customers get the benefit of the doubt. It’s built through the accumulated quality of ordinary interactions – and your payment process is one of the most frequent of those.