With the increasing complexity of vendor relationships and services, challenges associated with vendor relationships have arisen. That’s why having the tools to help you manage vendors in the best possible way is an essential competency for your business.
Even if you think that you're effectively running your business, it’s most likely that your employees are still performing many manual processes. In most cases, businesses get stuck in a routine when it comes to their processes - they execute their processes in a specific way because that’s how they’ve always been done, not because it’s the best approach.
Sticking with manual processes, instead of automating them, means less time for more important tasks, wasted resources, information that is not accurate or up to date, and the list can go on.
Let's take wholesalers as an example. They often get their supplies from vendors. However, if they don’t have a vendor management system, the process of keeping tabs of all their vendors is a highly manual process that involves manual updates to fractured systems and documents, with no efficient means of communication between them and their vendors.
Therefore, companies should consider implementing a vendor management system since it significantly can improve communication with vendors and reduce the amount of time employees need to spend on manual, time-consuming tasks, allowing them to focus on more important things.
Missing or outdated vendor information
Regardless of whether your current vendor management takes place through paper or in a spreadsheet, vendor information starts to become outdated as soon as it’s recorded. Processes that require paper or spreadsheets also need vendor documentation to be manually collected and maintained.
Since paper-based registrations are hard for vendors to maintain, chances are that much of the manually-processed vendor information is outdated or incomplete. That’s why it is so important to have a good system in place that will take care of these things.
Vendor data storage
It’s essential to have a centralized data storage solution for managing vendor data. If you don’t have a vendor management system, it can be really difficult to store and retrieve data, especially if you have to deal with multiple vendors at the same time.
However, a centralized data storage solution is not only beneficial for managing vendor data, but it can also provide you with a centralized view and improved visibility, which can result in better resource allocation and increased efficiency.
Vendor compliance and vendor payment risks
It’s crucial to set your standards before dealing with vendors. By doing this, you will save a lot of time and money. It’s important to realize that not all vendors are suitable for your standards, so make sure to choose a vendor that is able to meet your needs.
What can you do to avoid this risk? Ensure that you clearly define your business goals, as well as your expectations from the vendors. Let them know your requirements and how they align with your company’s goals. This way you and your vendors will be on the same page and you will manage to reduce risks related to vendor performance and compliance.
Besides vendor compliance risks, there are also risks associated with vendor payment. Some vendors may have different payment terms, while others may stick to industry-standard terms. Therefore, trying to figure out the terms and ensuring that the payment is always made on time can be challenging, especially when working with multiple vendors simultaneously.
There’s a great method that can help you ensure that vendor management delivers what is expected - risk assessment of vendor management, which is an ongoing process.
Vendor management comes with different types of risks - compliance, payment, operational, etc. What you have to do is to periodically identify the risks at every step of the vendor management process, assess its impact, and plan mitigation measures. This level of due diligence will help you reduce all vendor-related risks.
How can Naologic’s vendor management system help you?
NAO’s vendor management system is actually an automated pipeline that will help you keep tabs on all your stock. What's more, there's also a way for vendors to be assigned logins as guests so they can access their invoices and purchase orders. They can use NAO as a central means of communication with you.
Your life will be much easier since you no longer have to deal with tons of spreadsheets, email chains, and disparate conversations.
With the vendor management app, you can also easily migrate your vendors from other platforms through an intelligent import and matching capability built to make it as simple as possible for you to manage your vendors.
What are you waiting for? It’s time to overcome your vendor management challenges and enjoy your success!