Best Practices When Onboarding Suppliers


March 13, 2023

Having a clear process for bringing new suppliers into your supply chain is critical for maintaining efficiency, boosting profit margins, and creating profitable business relationships. Yet navigating the process of onboarding new suppliers can be complicated and full of challenges.

Connecting effectively with the suppliers that fill your company’s needs is vital in building long-term business success. Luckily, you can optimize the supplier onboarding process by implementing strategies that ensure your vendors get started on the right foot.

What Is Supplier Onboarding?

Supplier onboarding, also known as vendor onboarding, is the process by which you establish rules, expectations, and technical connections with new suppliers before you begin sending and receiving transactions. All the suppliers and vendors your business partners with become part of your supply chain.

The supplier onboarding process is the practice of enabling already-approved suppliers to begin trading with your company. Suppliers may use varying technology solutions and have different trading expectations than your company. Onboarding trading partners involves setting mutual expectations and requirements for trading, connecting your supply chain management systems, and ensuring everything works smoothly from a technological and personnel standpoint.

Standardizing the communication systems and key ordering processes that connect you and your suppliers is key to effective supply chain management. Standardization enables more trading partners to work together and drives efficiency throughout the supply chain. When you standardize the way your business communicates with and gathers information from its suppliers, you can make it quick and seamless to get your suppliers to the point of actively trading with them.

Supplier Onboarding Checklist

The supplier onboarding process involves several important tasks that address the different needs of your business and its suppliers. Having a checklist to get you through onboarding can help ensure you’re collecting the right data and streamlining the process to get suppliers ready to begin accepting purchase orders from you.

Here are the essential actions to include on your checklist and take during the supplier onboarding process:

  • Technology and tools setup: Technology like electronic data interchange (EDI) systems and supplier portals can significantly enhance how you onboard suppliers. From familiarizing suppliers with your system to managing compliance across your supply chain, technology is a must for vendor onboarding. You can use a supplier enablement solution to ensure your suppliers are EDI compliant, even if they choose not to use an EDI translator.
  • Integration testing: The next step in onboarding a new supplier is ensuring supplier data integration with your chosen supplier management system. This may include sending test documents from a supplier using the platform, and ensuring it is properly delivered to your ERP system. You’ll also want to use this time to ensure each supplier’s integration supports your compliance requirements.
  • Establish business rules: Clearly define and document your vendor requirements, expectations, and business policies, such as communication methods. Outlining this information for suppliers helps both parties understand what’s needed from them.
  • Training: Your suppliers’ teams will need training on the supplier enablement portal. Training ensures the integration and onboarding process is minimally invasive to your supply chain and that suppliers are equipped to adopt your processes. Outsourcing training to an expert partner like TrueCommerce can enable you to train suppliers faster and liberate your staff.
  • Establish compliance rules: Suppliers must meet the compliance rules you and your team define. These rules include both timeframe compliance and checking for specific information included in electronic documents. Establish these parameters with your team and then communicate them to your supplier during onboarding.

Supplier Onboarding Best Practices

An effective supplier onboarding process helps you avoid various risks and quickly begin trading with new suppliers. Implement these best practices to help your business develop an onboarding process that best serves both your company and new and existing suppliers.

1. Plan from Start to Finish

Planning your onboarding process from start to finish helps you stay organized and fine-tune the process moving forward. If you aren’t using a supplier onboarding partner like TrueCommerce, consider building an internal onboarding team and appointing a leader to keep onboarding on track.

Be sure to outline your onboarding processes clearly so they can be recreated and shared as needed. Consider how onboarding and ongoing supplier management will align with your other systems and processes. Additionally, plan to track data throughout the process so improvements can be made when needed.

2. Partner With a Supplier Enablement Provider

One way to better manage supplier onboarding is by partnering with a supplier enablement provider. A supplier enablement provider helps streamline outreach, training, testing, and compliance checks and standardize communication to simplify every step of the supplier onboarding process. Working with a supplier enablement provider can also reduce the burden on your internal teams and enable you to onboard many new partners more quickly.

3. Automate Where Possible

Automate as many of your processes as you can. Manual processes are time-consuming and have a greater risk of error. Investing in automation empowers your company to accomplish more.

A supplier enablement platform is a powerful tool for strengthening supplier relationships through automation and streamlined information-sharing. Supplier enablement platforms can automate various processes from data collection and analysis to document and transaction exchanges.

The platform proactively monitors the exchange of electronic documents and messages between you and your suppliers to ensure document exchange is working at peak efficiency. Ultimately, automating communication allows you to achieve more efficient onboarding and management processes.

4. Prioritize Data Security

As you exchange sensitive data and information with new and existing suppliers, you must ensure your and suppliers’ data is secure. Data security protects your customers’ private information, helping you and your suppliers provide high-quality service and build customer loyalty.

Waiting until you begin actively trading with a supplier to begin considering their data security can leave your businesses with costly and time-consuming security issues. Onboarding is the best time to identify any potential security risks a supplier poses and resolve them.

5. Provide Training

Your supplier’s team will need training on your supplier enablement platform to ensure trading runs smoothly once onboarding is complete. Suppliers must understand and be able to abide by your company’s expectations around transaction types and timelines and know how to comply with your business’s EDI requirements.

TrueCommerce offers true managed services with supplier onboarding, handling supplier training, testing, and communication. TrueCommerce’s managed service caters to suppliers of differing levels of technical maturity and provides a dedicated onboarding team to communicate with suppliers on your behalf. Using TrueCommerce’s managed service can significantly simplify the process and reduce the burden on your teams.

6. Have Due Diligence

Having due diligence ensures you’ve covered your bases during the onboarding process to prevent supplier risk and fraud as you move into an active relationship with your suppliers.

Stay educated and understand any compliance issues and regulations affecting your business at internal, local, state, and national levels to ensure you and your suppliers comply. It’s critical to test your systems during onboarding to ensure there are no data slips or security issues you ought to address before you begin actively trading with the supplier.

Make Supplier Onboarding Simple

Supplier onboarding can be a complicated process, especially when you’re trying to figure out what works. But with the right process and partners in place, you can use onboarding to ensure every supplier is secure, ready, and capable of trading seamlessly with your business.

If you are working with a partner already, make sure they adhere to best practices that are designed to protect your business and efficiently bring on new suppliers. You can also explore TrueCommerce’s robust supplier enablement solution, which is backed by a proven process from a fully managed service team.

To learn more about our solutions, integrations, and capabilities, contact our support team or request a free demo to see our platform in action.

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