How to Develop a Successful Vendor Onboarding Process: Best Practices, Process Flows, and Checklists

Every organization is unique in the way they operate. Different teams and processes require different needs, and the way companies develop a successful relationship with vendors will vary. However, the one thing that stays the constant regardless of vendor — the need for a robust, comprehensive, and efficient vendor onboarding process.

Developing new vendor relationships can be tricky. If companies don’t have an established methodology in place to onboard suppliers, they might be risking a damaged relationship from the beginning. Ensuring that these processes are streamlined before attempting a new vendor onboard helps companies in getting the relationship off to the best possible start. Afterall, good business always comes from good relationships. Just as the companies nurture customers,it is important for them to do the same with any type of vendor.

In this article, we are going to discuss the vendor onboarding process to improve business’ efficiency, performance, and profitability. While guidelines may require some adjustment, the article will help companies ensure you are following best practices and starting your suppliers off on the right foot.

Before moving forward, let us discuss what we are going to cover in this article:

  • What is Vendor Onboarding? 
  • Steps For Developing A Successful Vendor Onboarding Process
  • Importance of Smooth And Systematic Vendor Onboarding Process
  • Choosing the Right Vendor Management Software: Automating vendor onboarding process
  • Using Axonator To Develop A Successful Vendor Onboarding Process


What is Vendor Onboarding?

Vendor onboarding is an important part of the vendor management process which consists of a detailed and stringent evaluation of the information provided by the prospective vendors before their association with the company is approved, assessing the vendor-related risks to minimize the occurrence of any compliance-related issues with government mandates or company internal processes and the subsequent integration of the vendors with the company platforms in an efficient and foolproof manner to ensure improved business outcomes.

Steps For Developing A Successful Vendor Onboarding Process

A streamlined vendor onboarding process can help avoid expensive mistakes, including those that may put your organization at legal or compliance risk.  Following steps need to be implemented to ensure a smooth and successful vendor onboarding process.

Pre-Onboarding Activities

The procurement department needs to clearly establish the policies and criteria on which vendors are going to be assessed and evaluated and assign responsibilities to the team for this purpose. Also, the kind of contracts that need to be signed and enforced, quality and service requirements and expectations from the vendors also need to be framed beforehand. Having crystal clear policies and expectations will not only help in quick and systematic vendor evaluation but also help vendors in clearly understanding what is expected of them

Creating A Vendor Self-Service Portal

Setting up a vendor self-service portal that helps vendors in registering themselves for offering their services to a company is the first step in creating a successful vendor onboarding process.


Vendors can each submit all the required information and documentation required for their evaluation and companies can quickly verify and scrutinize the information for a faster process.


The vendor self-service portal also helps in billing, effective communication and collaboration with the procurement team subsequent to their acceptance.

Vendor Approval And Onboarding

After the information submitted by the vendor through the self-service portal is duly scrutinized and verified, the vendor-related risk evaluation is carried out where the technical and service capabilities of vendors are considered, their ability to fulfil the quality expectations and compliance with various government and company mandates are also assessed. After carrying out the necessary due diligence process, the vendor is accepted to supply the specified goods or services. The necessary documentation in the form of contract signing and training of vendors is also carried out.

Relation Building And Performance Evaluation

After the vendor has been successfully integrated with the procurement department of the company, various processes and procedures are implemented for ensuring transparency and trust in all dealings between the company and the vendors. Relation building with vendors is an important process that reaps huge benefits for companies as a good relationship with all its vendors ensures that companies are able to secure the best possible goods and services at the most attractive price.

Simultaneously, the performance of vendors is evaluated comprehensively on all aspects related to quality, compliance and timeliness of services among others and vendors are given ratings as per their performance. Vendors with great ratings are given first preference over others by awarding them more work and renewing their contracts promptly.

Contract Conclusion And Renewal Based On Performance Ratings

As stated above, vendors who get good ratings are preferred for contract renewal. Vendors who fail to secure the minimum ratings are not considered for contract renewal and the deboarding process for such vendors is initiated.

Importance of Smooth And Systematic Vendor Onboarding Process

A smooth and systematic vendor onboarding process is essential for effective and efficient vendor management and is greatly beneficial for companies. So, just as companies give due importance to managing client relationships, they are also recognizing the need and benefits of managing vendor relationships to build a strategic partnership with them.


The importance of implementing great vendor management and vendor onboarding processes is listed below.

  • Mitigation of vendor-related risks
  • Streamlining vendor management processes for increased efficiency
  • Ensuring compliance with government regulations
  • Creating and enhancing company brand image
  • Increase in ROI
  • Increased visibility in all related vendor management processes
  • Access to the latest data for key activities in vendor management
  • Better tracking and evaluation of vendor performance
  • Nurturing vendor relationships

Choosing the Right Vendor Management Software: Automating Vendor Onboarding Process

There are three important parameters for any business looking for vendor onboarding software that centralizes purchasing:

  • Easy integration with internal platforms and legacy systems already in use 
  • A self-service portal for vendors
  • Strigant security protocols to guard against cyber attacks and stolen data

The ability to justify the cost of vendor management software entirely depends on the size of business and the number of existing vendors work with. If the company has good relationships with existing vendors, but wants to look for options for future growth, they need software that can scale and handle complex needs. Thus,flexibility in costing and the ability for the software to scale along with your business makes cloud-based software come as a natural choice for companies.

For instance, if the inventory management company is looking at a way to manage vendor contracts, the company may want to have the ability to eventually add features that support shipping, stocking, handling backorders, and being able to use mobile apps to pick, pack, and ship products.

The following checklist can help your team discuss and select what’s needed to work with your vendors:


Streamlined review and approval processes, which result in faster time-to-hire.

Push Notifications and Project Management

Deadlines, low supplies, and other time or compliance issues; task assignment, process tracking, and work coordination

Payroll Management

Easy processes to organize vendor contracts, payments, and related expenses

Routine Tasks

Category management, centralized and standardized billing rates, invoicing, payment options, and configurable forms and requirements

Vendor Evaluation 

Axonator vendor management software helps you evaluate and measure the performance of vendors on multiple parameters like quality, compliance, service reliability, risk management, and much more

Vendor Self-Service

Intuitive portal for vendors to submit electronic forms and documents, information for approvals, and updates


Ability to use all types of functions through mobile apps, be it in the warehouse, distribution center, transport centers, or anywhere else that facilitates your business

Easy Integration

Software that integrates easily with existing systems

On-Premises Installation

Control for companies that prefer installed technology

Cloud-Based Platform

Easy installation and flexible pricing

Workflow and Integration

Reviews and approvals in alignment with company processes

Security and Risk Mitigation

Centralized solutions with built-in firewalls and other security features to protect company information, trade secrets, and financial resources

Using Axonator To Develop A Successful Vendor Onboarding Process

Axonator vendor management software is proving to be a great choice for companies who wish to streamline their vendor management processes and implement a successful and efficient vendor onboarding process for greater speed and accuracy. Creating a centralized repository where all the information related to vendors is stored and easily accessed is achieved by using the Axonator vendor management software.

In addition, the creation of a vendor self-service portal is simplified and made systematic by using the Axonator vendor management software. This helps companies to implement a faster, easily accessible and simple to use platform for vendors where they can easily provide all their information and documents related to their registration. After acceptance, vendors can easily communicate with the procurement team of companies for billing, invoicing, quality control, compliances and various other uses.

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