The Essential Guide to Choosing a Vendor Onboarding Solution Provider!Â
â€If you’re a business that relies on third-party vendors, you understand the importance of a seamless vendor onboarding process. The right vendor onboarding solution provider can save you time, reduce risks, and help you establish strong and sustainable vendor relationships.
In this essential guide to choosing a vendor onboarding solution provider, we’ll provide you with everything you need to know to make an informed decision. From the benefits of vendor onboarding to the key factors to consider when choosing a provider, we’ll cover it all.
What is Vendor Onboarding?
Vendor onboarding is the process of registering new suppliers in your companyâ€™s vendor management systems and getting them set up with your tools, processes, and workflows to transact with them. The onboarding process can be broken down into stages, including collecting a supplierâ€™s information, assessing vendor compliance and potential risks, and getting vendors set up to use your workflows, processes, tools, etc., for fulfilling orders, invoicing & payments.
A streamlined vendor onboarding process creates a repeatable sequence for registering new suppliers as approved vendors, making it easier to flag problematic suppliers early, cutting admin overhead (with automation), and helping improve satisfaction on both ends. Let’s dive into the benefits of an effective vendor onboarding process.
Benefits of an Effective Vendor Onboarding Process
A proper vendor onboarding process sets the stage for a healthy relationship with suppliers down the line. It lays out how the entire procure-to-pay process will be managed, how both parties intend to resolve any challenges, and how to measure performance. Here are some key benefits of an effective vendor onboarding process.
1. Streamlined Processes & Improved Efficiency
An effective vendor onboarding process creates a repeatable sequence for registering new suppliers as approved vendors. Your procurement department doesnâ€™t have to get creative, reinvent the wheel, or start from scratch when thereâ€™s a detailed sequence of steps for onboarding new suppliers.
By reducing the time and resources needed to onboard new vendors, you can free up your team to focus on more strategic initiatives that drive your business forward.
2. Strong Supplier Relationships
Strong vendor relationships are built on trust, communication, and responsiveness. A detailed vendor onboarding process outlines communication channels and lays out processes and tactics for resolving differences.
As a result, you can enjoy healthier vendor relationships when your suppliers know what to expect when working with you.
3. Minimize Risk
The onboarding process is where you do the bulk of your vendor assessment to ensure that using the services of a particular supplier doesnâ€™t endanger your business prospects. A comprehensive onboarding process will help you assess a vendorâ€™s compliance with financial, environmental, and labour standards that may endanger your companyâ€™s prospects if theyâ€™re not implemented.
By minimizing risk, you can protect your business and maintain a good reputation in the market.
4. Reduce Maverick Spending
Maverick spending refers to expenses that are done outside approved e-procurement channels. Itâ€™s a huge problem that grows with an organization and it can account for up to 80% of a companyâ€™s total spending, which can lead to losses of 10% â€“ 20% of projected savings.
When vendors pass through an onboarding workflow before employees can purchase from them, it creates a situation where all purchases go through approved suppliers who offer better rates & product guarantees.
By reducing maverick spending, you can better control your budget and achieve your financial goals.
Key Factors to Consider When Choosing a Vendor Onboarding Solution Provider
Now that we’ve explored the benefits of a vendor onboarding process, let’s dive into the key factors to consider when choosing a vendor onboarding solution provider.
1. Compliance with Regulations
Before choosing a vendor onboarding solution provider, ensure that the provider can comply with regulations to prevent fraud, money laundering, and terrorism financing. The compliance tools that verification vendors implement can be separated into two categories: Know Your Customer (KYC) checks and Know Your Business (KYB) checks.
Most KYC checks can be applied to businesses as well. KYB-specific solutions include business verification, UBO verification, and corporate document verification. Vendors may also offer transaction monitoring solutions, which allow companies to easily track transactions and detect suspicious activities on time.
2. Security and Privacy Measures
It’s essential to ensure the vendor’s security system and privacy measures are trustworthy. The vendor should have the technology to tackle sophisticated biometric fraud, device fingerprinting, and AI that detects photoshopped documents. It’s also necessary to ask whether the vendor can help the company stay compliant with regulations in operating countries.
Ask for audit certificates to verify the vendor’s security system, and ask how the vendor stores its data to ensure data privacy.
3. User Experience
Vendors should have features that quickly process users, leading to high customer retention. These include fast fail, auto-capture, language and country support, and workflow builder. If a vendor can provide all these features, the user experience will be as smooth as possible.
4. Ease of Integration
A proper vendor onboarding solution provider should be easy to implement. Look for providers that offer WebSDK integration, MobileSDK integration, API integration, and integration through a verification link or QR code. Also, check the time it takes to integrate the solution.
5. Customer Support
Check whether the vendor provides free technical support, free customer success, compliance specialist support, and free solution architects for the integration process.
6. Accuracy and Reliability
Ask which countries the vendor can process and in which languages the vendor can process identity documents. Look for vendors that offer high accuracy and reliability in their services.
Check the packages offered by the vendor and ask about the pricing model, setup, licensing, or support fees. Also, ask about the price per verification/transaction.
Thus, choosing the right vendor onboarding solution provider is critical to the success of your business. By considering the key factors we’ve discussed, you can make an informed decision that will save you time, reduce risks, and help you establish strong and sustainable vendor relationships.
A vendor onboarding solution provider that complies with regulations provides security and privacy measures, offers a great user experience, is easy to integrate, has excellent customer support, and is accurate and reliable is the right choice for your business.
We hope this guide has been helpful in your search for the perfect vendor onboarding solution provider. Good luck!