The Ultimate Guide to Understanding Vendor Onboarding Checklists for Superlative Vendor Management!
What is Vendor Onboarding?
The vendor onboarding process is an important part of vendor management and comprises of activities like the evaluation of vendors and their approval or acceptance in the procurement department of companies, making them acquainted to the quality standards for the goods and services they intend to supply and also making vendors aware of the compulsory mandates, both government and internal to make them better aligned with the overall working environment and structure of the companies.
Looking at the description above, it is obvious that we can draw parallels between the vendor onboarding process and employee onboarding done by the HR department of companies, where the potential candidates are carefully evaluated of their capabilities as per the role they have applied for and also make the new employees aware regarding the company culture, working processes and the expectations regarding their output.
On similar lines, vendor onboarding is a critical function carried out by the procurement department of companies and the vendors are given detailed information regarding the business practices, work processes, regulatory requirements and expectations after careful evaluation of their technical, financial and business capabilities.
How Vendor Onboarding Checklist Helps And What Does It Consist of?
Developing a vendor onboarding checklist is a great way to streamline the onboarding process for vendors. A well-structured vendor onboarding helps companies to increase their competitiveness since it leads to the faster evaluation of vendors who have registered on the vendor self-service portal and offer their services to companies.
Systematic vendor onboarding helps in cutting manual labor in vendor evaluation, clarifying expectations to vendors regarding product quality and increasing productivity for an improved ROI. A smooth vendor onboarding process also helps to mitigate vendor-related risks as it ensures that vendors are properly apprised regarding various government regulations and avoid compliance issues down the line.
A vendor onboarding checklist helps to integrate the disjointed processes in vendor onboarding and improves the data capture process and in gathering the required information from vendors essential for a successful onboarding process. A vendor onboarding checklist consists of different elements related to vendor sourcing, procurement processes, risk management, vendor evaluation and vendor compliance tracking. Specific checklists are created for each of these critical vendor onboarding components to ensure smooth and systematic implementation of the vendor onboarding process.
Components Of A Vendor Onboarding Checklist
The basis of a structured vendor onboarding process is a comprehensive checklist of different tasks that are categorized as per the different sub-tasks and the team entrusted with this critical process needs to check each item mentioned in the checklist as done to ensure that all the important tasks are completed. Here is an example of a vendor onboarding checklist.
Pre Qualification And Risk Assessment
- Vendor name and contact information
- Vendor licenses and the related documentation
- Service record
- Credit history evaluation
- Compliance assessment (industry, legal, government)
- Vendor related risk assessment carried out or not
Scrutiny And Validation of The Vendor Information
- Review of all submitted information and documentation submitted by vendors in terms of accuracy, authenticity and completeness
Vendor Qualification and Onboarding
- Conveying necessary information to the vendor regarding pricing, terms and conditions workflows, delivery
- Finalizing written contract
- Account set up
- Vendor training
Performance Evaluation And Relationship Development
- Spend data analytics
- Complaint history
- Adherence to quality standards
- Timeliness of service
- Compliance tracking
- Overall performance review and sharing review info with vendor
Contract Conclusion And Renewal Based On Performance Ratings
- Closing the current contract
- Contract renewal to be done or not (based on vendor ratings)
- Contract revision (in case of vendor contract is renewed)
- Vendor deboarding (in case contract not renewed)
- Implementing improvements in the process
It is important to emphasize that such checklists are just a tool to facilitate the entire vendor management process, however, the effectiveness of any set mechanism lies in the systematic and correct implementation of the processes to ensure that the desired objectives are met and this is where Axonator comes into the picture.
Axonator Helps You Create And Implement A Smart Vendor Onboarding Process
Axonator offers companies a fantastic software that makes a fundamental difference in the way vendor management is carried out and ensures systematic and accurate planning, capturing, tracking, automation and reporting of data collected through their apps for achieving better results. By streamlining data collection processes and enabling speedy and accurate execution of the set processes through the appropriate tools provided by Axonator, companies can reap the benefits of a smooth vendor management process ensuring a positive impact on their employee productivity, efficiency and profitability.