Several important factors are involved in vendor onboarding, but these can make an inefficient process. Onboarding begins, naturally, with the collection of the requisite information. How an organization collects vendor data touches on accuracy versus error, completeness, privacy and security.
An organization must validate vendor data to meet compliance requirements and ensure accuracy of the data, from contact information to bank account and tax identification numbers. And it must have an effective process to obtain and verify vendor data as efficiently as possible.
Effectiveness and efficiency, in this context, achieve the goals of complete and verified vendor information with little or no wasted time and energy. Therefore, organizations should analyze and optimize their vendor onboarding processes to secure and validate the necessary data, minimizing errors and effort and avoiding delay and rework.
How to Onboard More Efficiently
A well-designed, consistent, manual process is more efficacious than a haphazard or piecemeal approach. But such is the nature of the process that avoiding a piecemeal approach is challenging. Multiple input channels and lag times between tasks hamper efficiency and even thoroughness. There are, however, well-designed vendor onboarding solutions that drive the process from data collection to workflow and deliver much greater efficiency.
Such a system provides an integrated set of critical functions smartly designed to handle the multi-faceted task of vendor onboarding, all on a light, small footprint requiring none or very little of IT’s time. And an onboarding portal is available to vendors 24/7.
Gather Data Securely and Reduce Errors
Such systems include a portal that provides secure online vendor information forms (banking/ACH, W-9, W-8, vendor profile and change forms). The vendor enters its own data online. An advantage here is that vendors are very familiar with the data and less apt to err. The possible introduction of error at data entry is more likely when your accounts payable, purchasing or master file team rekeys data provided by the vendor. The transfer of data entry to the vendor also saves internal staff time.
Having vendors enter their data in a secure online portal provides greater security. Other methods of sensitive data transmission, particularly email, carry a high degree of risk.
A good onboarding tool allows customization of vendor forms. For example, your organization might need to gather information on diversity, business classification or certifications. It also permits the attachment of certificates of insurance or other required documentation.
Validation and Compliance
Vendor data must go through several critical checks, including sanction lists and barred party lists, the latter depending on industry or government involvement. A thorough program will also check against the death master file. And it must run the vendor’s name and tax ID through the IRS TIN Check program.
Another critical task that a vendor onboarding tool manages automatically is verifying the vendor’s bank account information with the vendor’s bank for ACH and wire payments. Automating these validation and compliance tasks saves organization staff tremendous time and ensures consistency for all vendors.
A good vendor onboarding tool handles all these checks, returning results to the organization flagging any problems. And it is scalable with growth. As a result, an organization can better manage vendor information to ensure consistent, secure, effective and efficient onboarding.
To find out how VendorInfo can help your vendor onboarding process, contact us.
