AP Proficiency Series: 4 Must Read Tips for Improving Vendor Onboarding!

As part of a series of articles that focus on best practices for improving the Global Accounts Payable function, I'm sharing FOUR tips for Improving Vendor Onboarding!

When we think about the first step of accounts payable, naturally we think "invoices." But the best AP processes consider the vendor onboarding experience before all else. Afterall, what good are invoices if your vendors aren't payable?

Why improving vendor onboarding is a worthwhile project:

• Reduces the initial administrative burden on your staff from manually emailing or calling vendors to collect what should be information you should obviously already have
• Reduces the ongoing administrative burden of answering payment inquiries, tracking invoices or payment status
• Ensuring accurate vendor and payment information reduces the risk of payment errors, double payment, and flags fishy vendors to reduce fraud
• Improves the overall experience for your vendors so you can strengthen those relationships, have better negotiating power for terms, and keep them happy and paid on time

So here are the FOUR quick vendor onboarding concepts that you can apply to your organization that will help build a smoother and more efficient Accounts Payable process:

1. Self-Service is Seamless & Secure

Traditionally, vendor details like address, banking details and preferred payment method are provided over the phone or via email. Not only is sending banking information over email a security risk, but it ties up your staff accountants' time which prevents them from spending their time on more productive things.

By providing an online self-service portal, vendors can enter and manage their own details in a secure environment.

Make sure to use a portal with your branding to ensure you continue to build trust and confidence with your vendors!

2. Validate Data... and Legitimacy

This might an obvious one but you'll be surprised with the number of failed payments as a result of fat fingers or outdated banking information. This not only wastes your staff's time when troubleshooting, but the fees add up to be substantial, and worse - you risk damaging supplier relationships due to delayed payments.

According to Levvel Research, 32% of companies report that payment errors are a top pain point, while 27% of companies report fraud and security issues as a payment challenge.

So make sure you have a system that validates bank details, as well as perform OFAC screening to ensure your payee isn't on any shady watchlists.

3. Collect Tax Forms Upfront

A simple one: collect tax forms like W-9s and W-8s upfront (when you first onboard your vendor) and make it a policy to not allow payments to vendors until they have one on file. This will save you the scramble during tax or audit season.

Bonus points if you can collect them digitally with an IRS-compliant form.

If you can validate the TIN on the spot, even better.

4. Give them Visibility

Put your vendors' minds at ease by letting them monitor the status of their invoices and payments. Remember that self-service portal? They can use that to check in on any pending payments.

Make the use of automated emails to keep them informed of incoming payments or when their banking and payment information is no longer valid.

Your staff will spend less time on the phones sorting this out with them as well.

So there you have it!

Four simple concepts you can apply to your AP process today to improve efficiency, reduce errors and strengthen controls, and improve supplier relationships.

If you're not sure how to implement these, a solution like Tipalti can easily check all the boxes.

For more information on how Tipalti can help, visit www.tipalti.com or check out the 60-second video overview below.