As we’ve shared in previous posts, many of our clients sign on to supplier network solutions after being sold on their virtues. They’ve heard that supplier networks will reduce purchasing cycle times, reduce paper invoice volume and manual processing, and increase the visibility of the order, invoice, and payment status. Sounds good, right? Yes—until it is time to onboard your vendors to your new supplier network.
Because we have decades of experience working closely with our clients, we have been involved with the implementation and rollout of several supplier network solutions. When they initially decide on a supplier network, our clients had not considered that there would be significant challenges when they began the vendor onboarding process. We would like to outline the four most common problems our clients experience when onboarding their vendors to a new supplier network.
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Vendor Supplier Network Fatigue
One thing we hear over and over is that it is a daunting task to convince vendors to change their business processes. Your vendors have many customers, and they if they all use a different supplier network, how can we expect them to keep up with our changes? Their customers’ supplier networks each use a different set of systems and rules. All vendors have their own business process around AR and billing, a process that must change in order to meet the network’s requirements. They see your supplier network changes as a distraction, at best, and a direct cost to them, at worst.
Demanding change from your vendors impacts your relationship with them
Your AP department likely prides itself on the good relationships it has developed with vendors over time. After AP has worked diligently to negotiate payments and discounts with suppliers and vendors, it’s counterproductive to strong-arm the vendors to take on additional work and cost in order to adjust to a new supplier network. When some vendors inevitably refuse to comply with your new supplier network, you could potentially lose them as a partner or at minimum create paperwork that now falls outside the process.
Cost of onboarding services
Supplier network solution providers can help you manage vendor onboarding, but they charge you significant fees for their vendor onboarding services. This is not a budget line item that adds direct value and thus is not an expenditure that managers want to advocate for. However, as we discuss next, to purchase a supplier network without paying for onboarding does not work, either.
A burden to your AP employees
Clients who have attempted to do their own onboarding tell us that they had to have very experienced resources calling and meeting with vendors to help fully understand and successfully meet the requirements. Their employees are high level and these hours spent calling and meeting with vendors represent valuable time and energy that could be spent on other tasks. When you purchase a supplier network solution in order to find efficiencies and cost savings, you need to consider the loss of efficiency and cost of the hours spent training your employees on the new solution and hand-holding your vendors through the required onboarding.
DataServ is here for our clients when they realize they don’t want to sacrifice their organization’s critical vendor and supplier relationships in order to transition to a new supplier network. We help preserve those relationships and maintain efficiency through AP automation. Our clients take advantage of our paperless OCR-intake process, which delivers clean and usable data with 99% pre-ERP accuracy. We give them a digital stream for purchase orders, invoices, and receipts, so there will be very little time required from their staff, vendors and suppliers to interact with our AP processes.