Obtaining and sharing critical supplier information between different functional areas can be frustrating for many organizations. Siloed organizational structures, disparate systems that don’t communicate with each other, and differing business objectives are factors contributing to this situation. Connecting procurement and finance through strong technology is crucial to maintaining good vendor relationships.
Other key areas affected by an unstructured approach to vendor management include supply chain, IT, legal, risk management, and security. In many companies, the most glaring example of this lack of sharing vendor data is within procurement and finance. While these two areas have different missions and goals, they share much of the same information. With modern technology, there is no longer any reason for this disparity. Here are some examples of technology that help to connect procurement and finance within an organization.
Vendor Portals and Onboarding
The use of vendor portals by all affected stakeholders allows organizations to collect, disseminate, update, and most importantly, collaborate. This is particularly helpful for ongoing vendor communication as well as vendor onboarding.
Procurement teams can utilize portal-based vendor onboarding and information management to achieve their goals. Accounts payable can use information obtained in the vendor onboarding process in their AP automation systems and vendor setup activities. Legal, risk management, supply chain, and security are alerted through notifications or workflows when new suppliers or significant changes may affect existing suppliers.
Likewise, the accounts payable department needs data obtained during onboarding to set up suppliers for payments, remittance, and ACH activities. Finance and treasury departments can also stay informed about vendor contracts and payment terms. They may even wish to act proactively by setting up dynamic discounting or vendor finance programs.
Vendor Management
Once onboarded, vendor management tools can help both procurement and finance to track compliance, notify vendors and buyers of upcoming expirations, and collaborate to update contracts, NDA, MSDS, and other critical areas of compliance. Both parties benefit from improved visibility into spending data, reduced payment errors, and enhanced financial controls.
Vendors are also able to update their own information on their own if anything changes, ensuring that all parties have the most updated information at all times. A line of communication between the organization and vendors is open at all times through ongoing vendor management technology. This allows all parties to stay in contact and stay updated whenever things change for any stakeholder in the relationship.
- Connecting procurement and finance is a best practice for companies with a significant number of vendors.
- Vendor portals allow all affected stakeholders to easily access vendor information.
- Vendor management workflows allow all parties to be aware of and help maintain compliance.
Get Started
For over 30 years, ICG has provided solutions that address companies’ ability to communicate, collaborate, and transact. ICG’s comprehensive suite of portal-based tools brings together all the internal and external stakeholders using portals to collect, update, share, and store data across functional areas in a secure environment.
Contact ICG today for more information about connecting your procurement and finance departments. Or, request a demo to learn more.