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As the world moves into a period of inflation, efficiency becomes increasingly crucial. with efficiency comes reduced costs, an improved competitive advantage, and, most importantly, an increase in profits.
However, while efficiency is on the minds of many, the question for many leaders is how can I develop an actionable plan to achieve procurement efficiency that will deliver a return on investment quickly? The answer for many is swapping out traditional supplier management techniques, like email, for a consolidated solution, like a vendor portal. A vendor portal is a tool for procurement teams to connect with their third-parties in a single web interface. But, what might this mean for your team?
Vendor Portal, Explained
Put simply; a vendor portal is a web-based platform that allows businesses to manage their relationships with suppliers and vendors. It is a central hub where vendors can access important documents, communicate with suppliers, and submit relevant purchasing documents like purchase orders or invoices.
Taken together, a vendor portal can be extremely beneficial for businesses since it streamlines the process of managing vendor relationships and reduces the risk of errors or miscommunications. It can also save time and resources by automating steps in the procurement process that would otherwise have to be done manually, such as the generation and payment of an invoice. For many, it becomes clear that a supplier portal is a key tool in achieving procurement efficiency. To understand why let's consider some of the key features of a vendor portal in greater detail below.
Self-Service Supplier Management
A vendor portal should provide vendors with access to all the important documents they need to do business with the company, such as contracts, purchase orders, and product specifications. However, modern portals also go so far as to enable team members to view and manage their account information, including a record of quotes, delivery dates and change requests. Therefore, in addition to being a central storage location, the self-service feature enables suppliers to access their information and make updates through a single, secure login. These updates should be visible to the merchant within their enterprise resource planning (ERP) system.
As a result, the vendor portal ensures that everyone is on the same page and reduces the risk of misunderstandings or errors.
Communication Tool
A vendor portal should provide a way for vendors to communicate with the business and vice versa. This could include a messaging system, email, or even video conferencing. Consider that today, thousands of emails may be sent for every change order needed in a delivery. A vendor portal eliminates an overflowing inbox by providing one place where all messages between a buyer and supplier are stored and can be referenced as an auditable trail.
Invoice and Payment Tracking
A vendor portal should allow vendors to submit invoices and track their payment status. This can help to ensure that vendors are paid promptly and that there are no delays or issues with payment.
Moreover, with SAP technology, some businesses that do not require a physical invoice have gone so far as to automate the payment process with Evaluated Receipt Settlement (ERS). With ERS, teams that have approved a purchase order and goods receipt in a two-way match can automatically pay their suppliers using their own records.
Order Tracking
A vendor portal should allow vendors to track the status of orders and shipments, including any issues or delays that might arise. This helps keep everyone informed and ensure that orders are fulfilled on time.
Performance Monitoring
A vendor portal should provide tools for monitoring vendor performance, such as tracking delivery times and quality metrics. This can help the business to identify any areas where vendors might need to improve and make any necessary adjustments to its supply chain.
Benefits of Incorporating a Vendor Portal
One of the main benefits of a vendor portal is that it can improve communication and collaboration between the business and it's vendors. By providing a central hub for all the information and resources that vendors need, the portal helps to reduce the risk of errors and miscommunications. It also makes it easier for vendors to stay up-to-date with the latest information and requirements, which can help to ensure that they are able to deliver high-quality products and services on time.
Another benefit of a vendor portal is that it can save time and resources for both the business and it's vendors. By automating the majority of tasks involved in managing vendor relationships, the portal can reduce the workload for both parties and allow them to focus on value-added tasks.
Building Your Inflation Action Plan
With benefits ranging from improved communication and time saving, a vendor portal becomes a clear path forward for businesses looking for an inflation battle plan. However, to get the most out of a vendor portal, it is important to choose a platform that meets the specific needs of your business and its vendors. This may involve looking for a vendor portal that is tailored to the industry or sector in which the business operates or one that offers a range of customization options to meet the business's unique requirements.
As you begin to compare tools, we recommend downloading this checklist to help you begin your search.
