How to overcome vendor onboarding challenges?

The coordination of many moving parts is vital to successfully onboarding a Vendor. If you were to choose a Vendor, your team would be able to have them fully onboarded in a matter of days. It is not always the case. The challenges of Vendor onboarding can quickly mount, from technology gaps to compliance issues to inefficient back-and-forth processes. If you handle your Vendor onboarding by yourself, it might take up to six months for some Vendors.

Continue reading to learn more about the challenges and best practices in vendor onboarding.

What is Vendor Onboarding?

Let's first define what "Vendor onboarding" means. It refers to adding a new Vendor to your business's flow, notably regarding trade documents such as orders, ASNs, and invoices. Onboarding guides the Vendor on how to submit complaint information. It can be done either manually or automatically through your backend systems. Onboarding is the time when both you and your Vendor agree on the format for these transactions. Once the Vendor is ready to accept and respond, onboarding is complete.

Although the process sounds simple, every Vendor has unique vendor onboarding challenges. These include time and resource consumption, security risks, and technical gaps. They also require compliance checks. With the right technology, onboarding best practices, and speed, you can quickly turn potential vendors into active Vendors.

Vendor Onboarding Challenges

Vendor Onboarding involves Time 

It is time that is important. If Vendor onboarding is done manually, it can get stuck in limbo for several months, which could cause you to lose sales. If you work with hundreds or even thousands of Vendors, it can be challenging to deal with many different types of Vendors with additional technical capabilities. Larger companies will have to coordinate multiple approvals between many departments, including finance, legal compliance, security, procurement, and security. There are often renegotiations and negotiations of contracts. More likely, multiple systems and data sources must be reconciled. Each one of these tasks requires energy, time, and team members.

Security risks in vendor onboarding

The key to running a successful business is minimizing risk. These potential negative consequences begin at the Vendor level and extend to customers' interactions with your brand. You must have a strategy that addresses these potential problems, particularly security. It can be prevented by making sure that your Vendor data is protected. 

Technical Maturity in Vendor Onboarding

Vendor onboarding often involves more than getting them to send and receive order documents. Sometimes they may have their data sources, solutions, or even no solution. Ideally, every Vendor could bring in an electronic data interchange (EDI), but some Vendors, notably smaller or newer ventures, may not have one.

Less technically mature Vendors might rely on email subject headings, sending PDFs, or sharing spreadsheets. Faxing hard copies can also be a problem. It could quickly overwhelm your information management team. You must also consider the actual processing of those Vendor data and how you reconcile it with your solutions. It opens up to inconsistencies, incomplete, or worse, incorrect information, which can lead to delays, fulfillment errors, and even chargebacks.

Compliance checks in Vendor Onboarding

It's unnecessary to stress the importance of compliance throughout your supply chain and business. It's not difficult to see how keeping track of compliance across hundreds or thousands of Vendors can be daunting. Negligence in this area can have many negative consequences, including disruptions in operations, product recalls, and customer cancellations.

It is why proactive approaches are essential. You should create compliance guidelines that include how your business communicates, what type of data you can send, how secure your data can be sent, and the methods to do this. Clear guidelines will reduce the chance of a compliance breach. Your team should clarify everything, from the format of documents to the order and timeframes. As part of Vendor Onboarding, this process should not stop at onboarding.

Solutions for Vendor Onboarding Challenges

Outsourcing saves time in Vendor Onboarding

Outsourcing the Vendor onboarding process can help you save time and reduce stress for your different teams. An established company can do outsourcing. While it may cost more, getting your product to market faster is much lower than outsourcing. This firm can act as an extension of your team.

• Take on the more difficult and complex tasks of onboarding
• To quickly exchange digital documents, open your entire Vendor network
• Your IT department can save time and money
• Create onboarding guidelines and technical specifications
• Increase the success rate in Vendor onboarding
• Provide ongoing support during and after the onboarding process

Compliance Management for Streamline Vendor Onboarding

Another task that can be outsourced is Vendor onboarding compliance management. It can be done using a combination of cloud-based technology and managed services. Again, this can act as an extension to your team. Instead of putting unnecessary strain on your IT staff by handling compliance tasks, your partner can take over. This includes the daily EDI-related Vendor issues, validation needs, etc. It will allow your IT team to focus on their priorities and prevent Vendors from calling your Accounts payable department if their invoice does not meet the validation criteria. The concerned parties can speak with the firm to resolve their issues quickly.

Leverage Vendor Onboarding Enablement

A Vendor onboarding solution provides a Vendor portal and a managed service that streamlines the information-sharing process while also speeding up your onboarding and strengthening your partnerships.

Instead of having to deal with a slew of PDFs, email attachments, and faxes, Vendors can access the portal to enter their data. Without requiring smaller Vendors, the portal translates and integrates data in your backend business systems. This solution can automate document sharing and provides a transparent supply chain and transaction log. Some answers can even track Vendor KPIs and onboarding status. This transparency allows you to track order status, inbound delivery status, and invoices and create a consistent, better experience for your customers.

Centralize your Requirements and onboarding Processes

Standardizing your vendor onboarding processes within your business is the best way to solve inconsistent and highly variable processes. This will allow your Vendors to adopt them. Your business will be able to focus first on the requirements of Vendors, which will make your onboarding process more efficient. These requirements can preemptively address compliance, legal, and security criteria. Another area where an experienced firm can help is Vendor management. They will also be able to assist with creating consistent workflows across the business.

Standardized vendor onboarding  processes not only make your operations and onboarding easier, but they also help your Vendors learn how to work with you. Your standardized information can also be made available to your Vendors if they have questions or need to be educated. Consistent processes give your remarkable business visibility. You can use this to ensure you provide accurate and complete information to your buyers.

Overcome your Vendor onboarding challenges with Taskmo

It doesn't need to be difficult or time-consuming to onboard Vendors. You can prioritize these issues according to the most pressing business needs. Contact Taskmo today if you are looking for a reputable firm with years of experience in managed and solutions services to assist with Vendor onboarding and management.