With success comes responsibilities. Whether it is ensuring that existing vendors are paid accurately and on time, or onboarding new vendors. Or, effectively managing simple logistics like curating vendor data and purchase orders, initiating refunds, and organizing vendor collaboration. "Simple", perhaps isn't the right word, given that logistics make up the lion-share of vendor management and costs both time and money.
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What is Vendor Management Software?
Vendor management software is a digital tool that helps businesses supervise vendor relationships from end to end. From vendor onboarding to vendor payments. It provides a centralized dashboard for vendor information, their payment details, and helps businesses evaluate vendor performance.
As businesses grow in scale and operations, the number of vendor engagement multiplies accordingly. Important supplier data which includes details like bill date, due date, items of purchase, and payment options for each supplier when multiplied is both difficult and tedious to manage, and subject to human error. Vendor management software helps curate all the vendor data like bank information, payment details, expenses, etc, for all the different vendors and beneficiaries in a single dashboard. This helps businesses simplify payroll, refunds, split payments between beneficiaries and franchise, make bulk payouts, etc.
It provides a streamlined repository of supplier data for businesses that collaborate with vendors, contractors, freelancers, or consultants.
How can billing software help with vendor management?
A vendor management software that functions simply as a data repository is not going to aid in the operational aspects of a growing business. A curated vendor portfolio without the ability to disburse payments accordingly would be as effective as a pen-and-paper ledger. A vendor management software that cannot make payouts or doesn't offer invoice automation is prone to the same human errors, cost of time, and money as a manual maintained database or excel sheet.
What small and medium-sized businesses need are digital solutions that offer vendor management across the entire lifecycle. From easy vendor onboarding whether new or existing vendors, curating vendor information like purchase requests, payment details, etc, to invoice processing and timely and easy payments.
While traditional vendor management software might suffice for a business that is just starting out looking to mitigate vendor risk, small and medium-sized businesses need robust digital solutions that can make their business processes more efficient. A billing software that can automate the vendor management process is just what the doctor prescribed. Billing software which is designed to automate payments for different service providers and would inherently need to curate that vendor information for accuracy making it a much more effective tool for vendor management.
The right billing software to manage vendors for my small and medium businesses
Businesses of all shapes and sizes would benefit from incorporating a billing software that helps manage vendors and suppliers.
However, there are a few features that small and medium-sized businesses need to pay particular attention to quite simply because they are in a constant state of growth. Small and medium-sized businesses need a vendor management solution that can grow alongside them and is robust enough to reduce business risk. The best vendor management solutions for small and medium-sized businesses must provide a 360 degree view of the supply chain.
You need a simple and efficient onboarding process that you can use not only for your vendors but also for your partners, your franchises, and your employees. Of course, they might be paid differently via different payment options or bank accounts or at different frequencies. But, you need a centralized database or dashboard that gives you a bird' eye view of the different cogs in the wheel.
Look for vendor management solutions that can assist in the various domains of your business. Whether it is payroll management or franchise payouts.
Multiple Payment Options
Once you have moved past the procurement processes and onboarded your employees, vendors, contractors, etc, what are the chances that they will adhere to the same cookie-cutter payment model? Not very high, right. Each vendor is likely to accept payment via a different mode. Add to that the complexity of the bank information and payment details for each of those vendors, franchise, etc.
That is a lot of information, moreover, it would be a logistical nightmare if you had to compute that information every time you make payment.
You need a vendor management software that can curate and automate that information. You need a billing software that offers multiple payment options (online and offline) so that you can make payments with just a few clicks. Whether it is a bank account, UPI, or eWallet.
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Whoever said that data was power, had it right. There is nothing quite as terrifying or crippling for a growing business as loss of data. You don't want to lose your supplier data and you most certainly don't want to make an erroneous transfer of funds.
You need a billing software that ensures both data security and data transparency. When making payments, you need to ensure that your beneficiary, whether an employee, vendor or franchise is properly vetted.
A billing software that helps you verify the beneficiary bank accounts in real-time before a payout is made, is your best bet against a regulatory compliance liability. This way, your billing software doubles up as both vendor and compliance management.
Choose a billing software for your supplier management that can incorporate and automate not just the new information but existing data as well. You need a simple but effective system that allows for data integration from multiple sources.
Not all you vendors are going to make online payments, not all of them will raise e-invoices. The online payments you make to the incoming invoices or your franchisees need to be consolidated. Moreover, you want to integrate the previous records you do have into the new vendor management software to monitor vendor relationships. You need a digital solution that does both.
You need a billing software that lets you upload existing data via excel sheet uploads so that you can initiate bulk payouts on them with a few clicks. As well as automatically creates comprehensive reports on payments already made, both online and offline. You need a customizable platform that can adhere to the multi-faceted demands of a growing small and medium-sized business.
Supplier management is only one side of the coin when it comes to choosing a billing software for vendor management. The reason billing software trumps the traditional vendor management software available on the market is that you can use it to make bulk payments. More importantly, you can automate your payments with multiple beneficiaries.
You can make payments to your vendors in bulk or one at a time. You can automatically split the incoming payments between one or many beneficiaries whether they are vendors or franchises. You can also customize how you want to split the payments between the different vendors and franchises.
You can add a percentage or assign a fixed value that needs to be paid to your vendors or franchises. That percentage or fixed value will be auto-calculated and auto-transferred according to your customized frequency and specification.
Once a vendor or franchise has been onboarded successfully you can simply pre-define the split payments. It is a one-time exercise that will yield results in both time and cost-efficiency.
You no longer have to manually reconcile the different payments via different modes to different vendors and franchises. The amount, whether it is a percentage or fixed value will be automatically transferred to your assigned beneficiary without error and without lapse.
Look for a billing software that allows for payouts to your franchises automatically or via a maker/checker mode. Once the payment or revenue split has been customized or configured, the payouts software will make the payments in a timely manner.
This way, your billing software doubles up as both payout software for your vendor and franchise management.
Whether you are a 10-man team or a small/medium-sized business with multiple vendors/suppliers and franchises. Whether you have a geographical niche you operate in or you have invoices coming to you from different parts of the nation. Either way, there is a checklist, of sorts, of supplier data that you need, which includes items of purchase, GST, bill date, due date, etc.
You need a standard invoice template that accounts for or includes these data points. You need a vendor management software that helps both you and your vendors access efficient invoicing solutions. So that you can provide them with customizable invoice formats that have been approved by you (and includes all the information you need for comprehensive reports).
These vendor invoices should reach you automatically and in a consolidated dashboard so that you can track the payments easily. The details of the standard invoice once curated on the dashboard help you access exactly how much is owed to whom and for what.
A vendor management system that offers a vendor portal is well worth the investment. It not only reduces errors but also saves you time. Time that would otherwise have been spent making calls, exchanging emails, and going back and forth correcting incomplete invoice formats from your vendors.
That is time neither you nor your vendors can afford to lose. And, it is worth its weight in gold.
Speaking of worthwhile investments, when looking for a billing software for your vendor management, ensure that it is a cloud-based solution. Not to put too fine a point on it, management tools that do not provide multiple access points will not be robust enough to keep up with the ever-evolving digital marketplace.
What you need is a cloud-based system that is compatible with your existing software and management tools while providing global access. Both you and your vendors need to be able to access the information easily. Not only for you to be able to disburse payments and keep track of those payments. But also to be able to save valuable time and effort coordinating with vendors about their payments. A supplier portal that lets your vendors log in to review their payment status with a reference number for their transactions eliminates man-hours spent fielding calls and exchanging emails to let vendors know when they will or have been paid. Vendor portals that aren't accessible to different industries whether they are media companies or software vendors won't serve you well.
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As a growing business, your success depends on smarter business decisions. Using separate management systems, one for expense management another for project management. One for financial services another for internal audit with a different one for vendor management is neither effective nor smart. All you are doing is creating more tasks for your team.
A billing software with automated vendor management will ensure both time and cost savings.