6 Vendor Portal Best Practices to Follow in the Coming Year

If your business is thinking about creating a supplier management portal in the next year, here are some best practices to implement.

Easy Onboarding

The portal should make onboarding new suppliers seamless. This is possible by designing it in such a way that suppliers upload important documents themselves which can be verified in real-time. This reduces the need for back-and-forth emails asking for a supplier’s payment details, tax information, and other important information. This reduces the strain on the business, saving money, and minimizing the likelihood of errors. Suppliers should also be the ones to upload and update their own catalogs. The portal should also have reminders to suppliers to update any documents that may have expired such as licenses.

Performance Tracking

A supplier portal today should allow both parties to track the performance of the supplier. Some metrics to track would be the variance between catalog prices and invoice prices, goods return rate, accuracies of quantities ordered, and on-time deliveries. Providing suppliers with such visibility inspires them to adhere to contract terms but they also provide a basis for discussion during contract renegotiations. These do not require sophisticated analytical tools to crunch, instead, there only needs to be a data collection methodology when events occur.

An Exit Process

Your supplier portal should provide a structured exit process for suppliers when the working relationship comes to an end. The portal should provide them with any documents they might need to fill out. They should also have an avenue to file any claims they have against your business. Such a managed process can help avoid bad publicity or a protracted process that is often expensive and distracting. When the process happens on the portal, it also provides evidence of how your relationship ended, in case any legal battles arise down the road.

Flexibility and Integrations

The vendor portal best practices you create in 2022 should be flexible enough to allow for customizations and new integrations to improve functionality. For instance, vendor portals today are integrated with the procurement software so that vendors receive order notifications in real-time when purchase requisitions get approved. Invoice generation should also be automated. For some companies, payments to regular suppliers are automated to avoid delays and maintain the relationship.

Inbuilt Communication for Collaboration

When the vendor portal allows departments to interact with suppliers directly, it improves the quality of relationships. Decision-makers can request additional information on the features and utility of items before ordering them. When this happens on the portal, it creates a trail of communication, which would be more difficult when relying on alternative external communication methods.

Having channels of communication on the portal also makes dispute resolution between a company and its vendors. Vendors should be able to raise a ticket that gets routed to the right party for a quick resolution.

A Contract Repository

The supplier vendor should be linked to a contract repository where all supplier contracts are stored. Supplies should be able to see, view, and track their contract with the company. A contract repository makes it easy to retrieve contract metadata as opposed to going through hundreds of pages of documents. The repository also increases the visibility of contract terms. It also makes it easy to update contract terms in case of renegotiations and renewals. With contract repository software, it’s possible to set alerts in case of breaches or when you need to request important certificates from suppliers. A repository, therefore, makes it easier to comply with regulations on licensing as well as securing sensitive information.

Make Detailed Agreements at the Beginning

During the supplier onboarding process, it’s important to draw detailed contracts between the business and the vendors. The business can engage the services of a legal team to hypothesize contingencies that could arise down the road. These should be well addressed in the contract terms. In addition, all terms used in the contract should be defined to help avoid confusion or misinterpretations.

Benefits of Vendor Portal Best Practices In 2022

A major benefit of a vendor management system is being able to keep all vendor records up to date. The business will always have the correct catalog from each supplier, thus eliminating the chances of ordering non-existent items. Having the most recent prices from each supplier also allows the business to benefit from the most competitive prices whenever they want to make an order. Over time, this can translate into massive savings for the business.

Using a vendor management portal to manage processes such as onboarding, contract management, invitation, and letting go of suppliers leads to standardization in vendor management. This leads to consistency in the way the business operates and adherence to procurement laws.

If you are experiencing trouble managing your suppliers using spreadsheets, it’s time to move to an automated system. A vendor portal will automate and standardize your processes while making it possible to objectively track supplier performance. You should be careful to pick a software partner with the right experience in proving e-procurement solutions. ProcurePort is the world’s leading supplier of e-procurement software. Reach us for a free consultation session.