HOW TO TAKE YOUR VENDOR ONBOARDING PROCESS FROM DAYS TO HOURS
If you are here you probably know that business relationships with new vendors can be incredibly cumbersome. Especially when you work with a large number of them.
The Vendor Onboarding process in particular can take days, even weeks. As it involves a multitude of departments with the ultimate goal to analyze whether it is safe or not to work with a prospective vendor.
Thanks to supplier onboarding software and other onboarding solutions, these operations can be easily streamlined. These solutions help facilitate the onboarding process, save time, and improve vendor performance. In this article we discuss how!
Let’s quickly give some important clarifications.
What is Vendor Onboarding?
Vendor onboarding is the process of collecting important data and documents required in order to qualify, approve, and contract with new vendors, purchase goods and services, and make timely payments to new and existing partners.
Why is the Vendor Onboarding process important?
Long story short:
Because not doing proper onboarding and evaluation of your suppliers can put your business at huge risk.
Because having an inefficient process in place is costing companies way more than it should.
The vendor onboarding process not only helps you strengthen supplier relationships, but it also helps protect your company by:
Doing third party risk assessment
Which includes evaluating quality, cost, technological capabilities, financial status, operational, reputational and data security risk.
Ensuring compliance with legal requirements and expectations
vendor onboarding process importance
How to streamline your Supplier Onboarding process?
Did you know that, on average, vendor onboarding can take as long as six months for larger companies?
» This happens because due diligence processes are often cumbersome and lack transparency, making it difficult for all parties involved to stay on track and keep effective communication.
Some of the steps that often delay vendor onboarding include:
Background checks
Risk assessments
Legal approval process
Corporate social responsibility policies
Reliance on manual tasks
Inability to keep track tasks, documents and communications
Optimizing your vendor onboarding process – by streamlining workflows and identifying areas that could be automated – will speed it up and simplify the overall process for all involved parts.
How, then, can you identify whether your vendor onboarding needs to be optimized?
Here are a few questions you can ask yourself.
Is my supplier onboarding process taking longer than it should?
Are we gathering the right supplier data?
Have we identified all the steps needed for the process?
Are we duplicating tasks?
Once the onboarding process is over, is supplier management easy?