The vendor onboarding process

What is vendor onboarding?

Vendor onboarding can be described as the process of establishing and hiring new vendors to work with a business. This includes collecting information, documents, and data from the potential vendor and using this to decide whether they are the right vendor to work with. Once approved, this process also helps the vendor to get set up with tools and processes to help them successfully integrate with the business. This is usually the first step in a lasting relationship, so ensuring the onboarding process is successful is key.

The benefits of a vendor onboarding process

Vendors can be seen as the vital part of any business, so not only do you need to onboard the right firms, you need to ensure the on-boarding process is a success and creates excitement within your vendors about working with you. There are many benefits of having a successful vendor onboarding process. Firstly, the process can help minimise risk by assessing each vendor to ensure they are compliant with your financial and legal regulations to avoid any issues further down the line. Another benefit is that the vendor onboarding process can improve the efficiency of registering new vendors and every new vendor will go through the same process ensuring they are all consistently treated the same. This also contributes to building stronger relationships with vendors as using a detailed onboarding process will allow you to outline your aims and the communication strategies, allowing for a more seamless experience for your vendor

How to create a successful vendor onboarding process

The on-boarding process can vary for different companies depending on the type of vendors they are looking to onboard. However, there are a few steps that are useful to include in most vendor on-boarding processes.

‍1. Accessing information and verifying and approving documents:

‍This first step is crucial in getting to know your vendors, and for your vendors to get to know you and your company. This is when you and your vendor exchange document providing the information needed for them to become a vendor. Some information that should be exchanged is the aims and values of the business, the project background and challenges, contact information, ways to give feedback, tax information, financial history, compliance information and more.

2. Define term and conditions:

‍This is key to any vendor onboarding process as this is where you are able to set expectations and requirements of the vendor. For example, delivery time frames, schedules of payments, communication of time frames and more. This helps to set these expectations from the start to avoid any issues arising in the future.

3. Sharing the vendor information:

‍After your company has all the correct information from the vendor and the expectations have been set, it is time to share this with your stakeholders, warehousing department, purchasing department and accounts department. This will then allow these relevant departments to review the new vendor and share a final contract before the vendor is approved.