What is Vendor Self-Service?
Vendor self-service is a popular trend in procurement, accounts payable, and finance because of the tremendous value it delivers. Vendor self-service is the process by which vendor management activities are directed away from the buying company to the vendor. In this blog post, we’ll discuss three different processes that lend themselves to vendor self-service.
Traditionally, many vendor activities required the buying company to do all the research and outreach to obtain the data and documents required. These processes tend to be very manual, slow, and time-constrained. Tasks like making contact and research can be incredibly difficult depending on the vendor involved. The result of these inefficiencies can be poor use of working capital, frustration from lingering unresolved disputes, uneven cash flows, and missed discount opportunities. There are difficulties for both the buying company as well as the vendor.
Three common processes that benefit from a vendor self-service program are accounts payable, dispute resolution, and vendor onboarding. These functional areas can benefit from a vendor self-service program facilitated through cloud-hosted vendor portals. Let’s examine each area:
Accounts Payable
AP benefits from vendor portals and vendor self-service in two main ways: directing vendor payment inquiries through the portal and delivering the answers based on the payment status in the buyer’s ERP or AP Automation application. Instead of a vendor calling a company and having the buyers’ personnel research the payment status and then respond, the vendor can log into a portal and ascertain the payment status without effort on the part of the buying company.
Additionally, vendors can submit invoices or other payment documents to the buying company directly through the vendor portal by filling out a web form, PO flip, or uploading a billing file. The information provided is then sent to the buyers’ payables systems and processed for approval and/or payment. No need to open mail, scan documents, enter invoice information, or perform any other manual activities found in a traditional process.
Dispute Resolution
One of the more labor-intensive processes in vendor management is payment dispute resolution. A vendor may dispute the amount a buyer paid, which differs from the invoice generated by the vendor. A buying company disputes a payment amount for many reasons, but resolving those disputes can be labor-intensive, slow, and burdensome for both parties. By allowing the vendor to submit disputes through the vendor portal, the buying company can quickly and efficiently resolve issues.
Vendor Onboarding
Vendor onboarding means collecting the data and documentation necessary for a company to become a vendor. The buying company must then complete the labor-intensive task of collecting and validating vendor information. With a self-service vendor portal, potential vendors can log on and supply the necessary documents, such as insurance certificates, tax documents, licenses and certificates, contracts, and the data required to complete transactions, such as address, product, and contact information. Additionally, vendors can continue to update this information throughout the duration of being a vendor for the buying organization.
Automated validation tools inside the portal validate the legitimacy of a company’s Tax ID number or SSN by matching it against the IRS database. Numerous other validations can be done through automated systems to reduce time-consuming activities. The self-service portal also acts as an ongoing management tool by tracking expirations for insurance and licensing. Additionally, it can send automatic notifications when a vendor is approaching non-compliance.
Get Started
Vendor self-service is incredibly helpful for both vendors and the buying organization. It saves time and money on both ends, allows for better and faster communication, and strengthens the relationship between the two parties. These are three common processes that lend themselves to vendor self-service, but there are numerous other opportunities that vendor self-service offers. Contact ICG today to learn how you can implement a vendor self-service program. Or, schedule a demo of one of our vendor management solutions.