All About Vendor Management
Vendor management covers many areas involving how companies identify, onboard, and transact with vendors and suppliers who supply goods and services to their organization in exchange for payment. The processes involved in managing these vendor-centric activities can vary greatly by industry, company, and even departments within a company. Companies that rely heavily on their supply chains for the existence and growth of their businesses will often take a very detailed and thorough approach to how they source goods and services and onboard the providers of those goods and services. This makes automating vendor management especially important.
Benefits of Automation
This approach can include vetting potential suppliers to ensure they are healthy companies with strong business continuity plans, making sure that potential suppliers comply with all policies and regulations as set forth by the company and any government regulations that may apply, validating that the supplier has the coverage to supply all the necessary business units in your organization’s geography, validating that the vendor does not appear on any national or international lists that would impact your ability to do business with them, validating that the vendor has current and adequate insurance coverage to meet your requirements, and ensuring supplier complies with all licensing and permitting as required.
The activities needed for collecting and validating large amounts of data and documents required to onboard and transact with a compliant supplier can be very cumbersome and manual. As a result, human error comes into play, and critical details and activities can slip through the cracks or be overlooked altogether.
Other benefits of automation include more time to work on higher-level activities, as well as fewer errors. Automation is also beneficial in many different areas of your business.
Example
Consider the situation of a regional convenience store chain that was manually managing the insurance coverage and expirations of its vendors, as well as many other areas where validations are time-sensitive and critical.
A vendor who had done business with the organization for years by plowing snow from their locations during the winter months let their insurance coverage expire. The C-store company that tracked insurance coverages and expirations manually was not aware of this expiration, and unfortunately, a tragedy occurred when the snowplow fatally struck a customer in the parking lot of one of their stores. Because the plow driver was a small business with few assets and expired insurance, the C-store company was liable for significant monetary damages. This situation could have been easily avoided if the company had the right vendor management systems and processes in place that validated insurance coverages and tracked expirations.
Business Tools
Below is a partial list of the business tools and solutions available to companies looking to advance their vendor management capabilities while at the same time streamlining their procure-to-pay processes:
- Vendor Onboarding / Supplier Onboarding
- Collect company information
- Tax documents and TIN validations
- Insurance COIs
- Diversity tracking and validations
- PO Dispatch & Update
- Automatically dispatch purchase orders and any subsequent revisions
- Proactively reach out to suppliers to request status updates on critical orders
- Vendor Portals / Supplier Portals
- Submit invoices/payment requests through the portal
- Online payment inquiries
- Payment dispute submission & tracking
- Dynamic discounting & supply chain finance
- Real-time vendor collaboration
- AP Automation
- Remote approval and exception processing workflows
- Data and document capture
- PO matching
- Online forms/payment requests
- General ledger cost distribution
Get Started
Vendor management portals are ideal for providing better service, efficiency, risk mitigation, and lower operating expenditures. At ICG, we make sure your vendor portal or supplier portal is designed to meet your business process needs. We will help you to communicate, collaborate, and transact with your vendors in a secure and efficient portal environment 24/7.
Talk to our customers and see how they are managing their diverse population of vendors, large and small, to the benefit of their organization as well as that of the vendor. Strong, healthy vendors make for strong, healthy supply chains that will help you to sustain and grow your business. ICG offers a variety of vendor management solutions to fit your unique needs. Contact ICG today for more information or request a demo of our vendor management solutions.