What does Vendor Management do? Does it help?

October 8, 2020
Vinay Agrraval
Vendor Management

Who are vendors? Who manages them?

Broadly known as ‘suppliers.’ But, the management term used is ‘vendor.’ A vendor can be an individual or a business entity that provides services to an organization. They are usually third-party suppliers or service providers an organization reaches for specific tasks or requirements.  Vendor Management is the process of managing the vendors. The person who maintains the relationship between the vendor and the organization is called the ‘vendor manager.’ Examples of vendors:

·      Cafeteria/Canteen services

·      Stationery/office furniture supplier

·      Commute providers

Simplifying Vendor Management:

Are you thinking, ‘why would one need a vendor management team?’ Instead, you can dial in for some vendors, discuss the requirements, check for the cost involved, and either close the deal or go for a new one. Right? It is workable for a small organization where there is only one vendor requirement.

However, vendor management plays a crucial role in a more prominent organization where they have to deal with one or more vendors. For the multiple procurement processes, the organization makes frequently, the organization/the manager has to analyze, segment, and manage suppliers, for which vendor management is necessary.

Why you need Vendor Management Software?

The concept of vendor management might be clear now. So, when the list of vendors is growing extensively, what do you resort to – paper or software? As every detail needs to be tracked and recorded. We suggest vendor management software will be a right choice, as it serves better. To clarify, here are the three core purposes of vendor management software:

·  Vendor management: Individually, we look for different mediums to interact with people. Here at the organizational level, Vendor Management software is the channel between the vendors and the manager. This medium helps in better communication and the process of work.

·  Project management: VMS is a great help in project management. It makes tasks of assigning, processing, tracking, and coordinating easy.

·  Vendor Payments: Procurement and payments constitute a significant part of the vendor transactions; these have to efficiently track and recorded, VMS is the best way to do this job.

Benefits of Vendor Management software

When we look form the organizational perspective, it is always necessary to ensure that the steps taken for the growth of the organization are structured well and result in better and efficient business. Below stated are the benefits of how a Vendor management software can help the company achieve a streamlined process across the deal life-cycle.

1.     Be selective with whom you must invest:

Adapting vendor management gives a choice for an organization to select vendor/s from a larger group, based on who is offering better costs. Being the procurer or the buyer, you can bid between the vendors, and choose the one who gives you better choices and services worth the money.

2.     One-stop-shop:

Vendor Management Software is built on a concept of one-point access/one-stop-shop, wherein the user/manager can manage all the processes(requests, approvals, purchases, and receivables), that is, the entire deal life-cycle with one solution. This unified view is accessible for the whole team who are involved in the processes.

3.     Until the contract is signed, nothing is real:

Vendor Management is all about managing your vendor contracts, the terms, pay rates, contact details – this scenario comes into action when there are multiple vendors.

With no Vendor Management software in place, you cannot structure the entire process involving risks like losing essential and useful information. At the same time, proper management of content and having all the access in a single-mode simplifies the course along with resulting in informed decisions and time-saving.

4.    Perform/grow better with integration:

Your work will turn easy-peasy if the accounting suites (Tally, QuickBooks, etc.) are integrated into the VMS. Automation is the key to payment cycles, rejection flows, and effortlessly match procurement orders with invoices, and make excellent pay.

 5.    Let there be mutual growth:

Vendors feel happy and secured if there is transparency in the transactions and get real-time information about their invoices’ approval and payment progress. Vendor Management Software also makes on-boarding hassle-free, share requirements, and receive competitive bids from registered vendors. You can save more time by streamlining all the manual and repetitive tasks.

Wrap-up: Vendor Management is a unique way of connecting and communicating with vendors. The result of using a vendor management software, an organization can establish excellent service, quality, cost control, and job satisfaction goals. Implementing vendor management with the help of Vendor Management Software in your organization adds value to the business. It helps the company to thrive, improve earnings, and result in long-term savings.

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