Automating Vendor Management

Why automating your vendor management will benefit your organization

Vendor Management covers many different areas of 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 & services and onboard the providers of those goods & services.

This approach can include vetting potential suppliers to ensure they are healthy companies with strong business continuity plans; making sure that potential suppliers are in compliance with all policies and regulations as set forth by the company and any government regulations that may apply; validate that the supplier has the coverage to supply all the necessary business units in your organizations geography; and validate that the vendor does not appear on any national or international lists that would impact your ability to do business with them; validate that the vendor has current and adequate insurance coverage to meet your requirements; ensure supplier in in compliance with all licensing and permitting as required.

The types of activities needed in collecting and validating voluminous amounts of data and documents required to onboard and transact with a compliant supplier can be very cumbersome and is often a mainly manual process. As a result human error comes into play and critical details and activities can slip through the cracks or be overlooked altogether. Consider the situation of a regional convenience store chain who was manually managing the insurance coverage and expirations of their vendors, as well as many other areas where validations are time sensitive and critical.

Example

A vendor who had done business with the organization for years by plowing snow from their locations during the winter months had let their insurance coverage expire. The c-store company who tracked insurance coverages and expirations manually was not aware of this expiration and unfortunately, tragedy occurred when the snow plow 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 the 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.

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
    • contacts
    • remit to addresses
    • products and services
    • financial information
    • references
    • licenses, permits, etc. (track expirations)
    • sustainability program info.
  • tax documents and TIN validations
  • insurance COI’s
    • track expirations and proactively notify buyer and vendor
  • diversity tracking and validations
    • expiration tracking
    • reporting data

• PO Dispatch & Update
  • automatically dispatch purchase orders and any subsequent revisions
    • track responses, or if no response, notify buyer
  • proactively reach out to suppliers to request status updates of critical orders

• Vendor Portals / Supplier Portals
  • submit invoices/payment requests through the portal
    • web forms
    • PO flip
    • upload billing file
  • 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

Vendor management portals are ideal for providing better service, more efficiency, risk mitigation and for less operating expenditures. At ICG Consulting, 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 th 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 businesses. ICG offers a variety vendor management solutions to fit your unique needs. Contact ICG today for more information or request a demo of our vendor management solutions.