4 Ways to Boost Your Vendor Management Process

— July 13, 2019

The vendor management process can be undeniably complex and unwieldy, with a number of different stakeholders involved and multiple parties to satisfy. It is vital that vendors find the purchaser’s processes user-friendly and efficient. It is also just as important that the individuals involved in the processing, administration, and approval of the vendor management process find it easy to work with, too.

Despite this, many organizations still rely on outdated and administrative-heavy manual processes rather than automated ones. There are plenty of opportunities to be found by levelling up vendor management with automation. Let’s take a look at some of the key areas that your business could benefit from and see how you really can improve your vendor management in thirty minutes.

Authorize invoices efficiently

High volumes of invoices (and other supporting documentation relating to them) flow through every organization day in, day out. But dealing with them can be a time-consuming and messy process, involving employees to input details into a database or record, various levels of managers to check and authorize them, and the individuals in the finance team to balance and pay them. Inevitably, issues arise due to the number of hands that the information passes through, and discrepancies and queries are commonplace.

Using an intelligent automated vendor management system, however, can help streamline invoice management by implementing automatic audits and comparisons of the data to eliminate potential problems. Further, using an automated system can integrate with modern finance systems for efficient payment and data integrity comparisons.

Stay on top of key contractual timelines

It is typical that an organization has a multitude of different contractual agreements with its various suppliers, often with some common key terms but also some variations and anomalies to reflect the different circumstances of each arrangement. Automation helps to consolidate this information in one, easily accessible place so the vendor can view details when, for example, renegotiating a contract or comparing terms across different suppliers to ensure value for money. In addition, automated reminders can be set up to flag key dates such as contract renewals, pricing clauses, etc. so that nothing vital is missed.

Track and analyze supplier performance

The importance of monitoring the extent to which an organization’s vendors are delivering their service satisfactorily is a key metric for the procurement team. The team’s objective is to ensure the highest quality products or services are delivered to the business at the best possible price. Although procurement teams generally monitor vendor performance, using automation provides great opportunities to refine this and take the analysis to the next level. For example, rather than using the data that is captured on an individual supplier basis to track their performance, automation offers a way of quickly comparing the data to that of other, similar suppliers, as well as to the pre-agreed contractual terms. This can be done in seconds, rather than the many man hours that such a manual exercise would take.

What’s more, it is often the case that the data exists in its original, raw format, making a robust analysis of performance unreliable, not to mention time-consuming. The most modern and intelligent supplier management systems allow seamless data capture and subsequent analysis from IT service management tools to enable genuine and clear cut objective comparisons of performance across a range of variables, including supplies, functions, territories, and departments.

Use more efficient and compliant governance meeting management

There are many, and frequent, lines of correspondence between purchaser and vendor, from initial sales meetings and agreement of contractual terms to progress updates and renegotiation of terms. It is likely that this important information is spread across various places, such as emails, spreadsheets, and soft copy files. A good vendor management system has the functionality to store all such information in one place so that it adheres to good compliance and governance regulations. It is also easily accessible for teams to view and analyze to efficiently follow up communications based on fact.

Take your vendor management processes to the next level

Maybe you already automate some of the processes in your supplier management field, which is certainly preferable to relying on outdated manual interventions. However, the changing landscape of the e-procurement market means that there are more sophisticated and innovative ways to improve the efficiency of your vendor management processes.

Spending too much time on laborious manual tasks costs your business hard cash in employee costs, dealing with inaccuracies and miscommunication, and an inability to robustly monitor and analyze supplier performance to ensure you are getting the best return on your money. It is seamless to achieve vendor management in five easy steps by embracing the best that automation has to offer in supplier management and taking your procurement department’s work to the next level.

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