Supplier Onboarding for EU Businesses: How to Improve Your Onboarding Process

Supplier onboarding is a crucial part of accounts payable (AP) operations, but it’s not always smooth sailing.

Manual data collection, document verification, and EU compliance checks can delay invoice approvals and payments, potentially straining both your AP team and supplier relationships from the start.

This guide explains what supplier onboarding entails and how to create an efficient process that reduces AP workload while ensuring EU compliance. 

What Is Supplier Onboarding?

Supplier onboarding, also known as vendor onboarding, is the process of verifying, approving, and integrating a new supplier into your accounts payable and payment systems. This enables your business to process and pay invoices securely and efficiently.

During onboarding, you collect and analyse supplier information to ensure a vendor meets your company’s standards and European Union (EU) regulatory requirements. This involves: 

• Conducting due diligence and AP-relevant risk assessments, such as bank account validation, duplicate supplier detection, and fraud checks.
• Collecting business, banking, tax, and payment details needed for invoice processing.
• Validating supplier data to ensure correct VAT reporting and prevent payment mishaps.
• Integrating a supplier into your AP, ERP, and supplier management solution.

While procurement may handle sourcing and contracting, AP owns the financial, tax, and system-readiness tasks required to pay suppliers accurately and compliantly.

Getting supplier onboarding right keeps invoice payments running smoothly—reducing disruptions, EU compliance risks, and miscommunication that can impact cash flow. 

A well-structured process provides the foundation for strong vendor relationships, faster invoice approvals and payments, as well as improved operational efficiency.

Why Effective Supplier Onboarding Is Important for EU Businesses

Effective supplier onboarding sets the tone for your business relationships. 

A smooth process streamlines validation, approval, and integration, fostering trust in your business. It improves the supplier’s experience while boosting your team’s compliance and productivity.

Here’s why the right onboarding approach matters.

Meet Your EU Compliance Requirements

Under EU law, your business has to collect and report detailed information about suppliers for tax and regulatory purposes.

A robust early-stage due diligence and document approval process helps you gather accurate details to meet compliance obligations from the start.

AP’s role includes verifying VAT numbers, validating bank details using compliant checks (e.g., IBAN/SWIFT formats), ensuring correct tax forms, and maintaining audit-ready records. AP is typically the final control point before invoice processing and tax reporting begin.

Here are the European Commission rules you need to comply with during onboarding:

Collecting the correct supplier business and VAT information is crucial for accurate invoice management and tax reporting. To ensure compliance with EU rules:

• Keep records for 5 to 10 years, depending on the EU member state.
• Securely store and make records readily available for tax inspections upon request.
• Follow EU General Data Protection Regulation (GDPR) rules to protect and lawfully process data.

Failing to meet your obligations can result in a non-compliance penalty. It can also lead to reputational risks that damage trust and long-term supplier relationships. 

An effective process prevents these missteps as accurate data flows through your system.

Build Supplier Trust and Strengthen Relationships

Onboarding is often a supplier’s first in-depth interaction with your business. A smooth experience lays the groundwork for a strong relationship and sets your reputation as a trustworthy buyer.

A disorganised or prolonged process can leave providers feeling uncertain about whether working with you is the right decision. Efficient onboarding, on the other hand, makes a supplier’s life easy. 

By implementing a process that clarifies expectations and responsibilities from the start, you promote trust and transparency—key ingredients in a lasting partnership.

Additionally, reliable communication channels facilitate easier collaboration and nurturing of relationships. When suppliers know how to submit invoices and how payments work within your AP system from day one, it reduces confusion and accelerates time-to-payment.

The result? Less friction, 66% reduction in payment errors, faster approvals, and fewer support tickets for “Where is my payment?”. That’s more time for your AP team to focus on higher-value tasks like cash flow analysis, performance management, and process optimisation.

Streamline AP Workload and Lower Costs

Effective supplier onboarding also removes bottlenecks for faster approval and payments to vendors. In other words, it’s a cost-saving exercise. 

Each time you onboard a new supplier, you have direct expenses such as: 

• AP labour and procurement labour (where applicable)
• Onboarding tools
• Risk management (e.g., financial background and compliance checks)
• Training materials 

Manual workflows such as data entry, collecting documents via paper or spreadsheets, and email approval chains prolong processes, significantly inflating these expenses.

Streamlining supplier onboarding with automation solves this problem. By automating document collection, validation, and invoice processing, you can reduce AP workload by up to 80%.

When your team does more with less, your business will find it easier to onboard suppliers at scale, keep costs low, and deliver value quickly. 

Improve Payment Data Accuracy and Minimise Errors

Capturing accurate supplier information during onboarding gives you reliable data throughout their lifecycle. 

This accuracy is crucial for EU compliance as well as for improving supplier experience and financial health.

If your invoice payment process relies on endless email chains and siloed data, you lack the visibility and accountability required for effective vendor management. And it only compounds as your business grows and manual processes become unsustainable. 

Improving AP efficiency through automation and data centralisation enhances information management. By eliminating data gaps, you can reduce:

• Invoice errors.
• Payment disputes.
• Duplicate supplier entries in your enterprise resource planning (ERP) system.

Additionally, teams can better manage cash flow and financial reporting while spotting sourcing opportunities to meet business goals.

6 Steps to Create an Efficient Supplier Onboarding Process

The goal for efficient supplier onboarding in accounts payable is to create a fast, compliant, and consistent process.

You need to reduce manual effort while improving accuracy and supplier experience. It starts with clarity and structure—understanding what suppliers need and implementing a system that meets their requirements.

Here’s how to ensure an easily manageable supplier onboarding process that’s both reliable and scalable. 

1) Map and Refine the Supplier Journey

Documenting every step a supplier takes—from the first point of contact to full integration—helps you identify inefficiencies, redundant steps, and areas to automate.

While your specific process depends on your systems and procedures, here’s how you might plot out the steps in a typical supplier’s journey: 

Visualising your current process makes it easier to see where you’re falling short and what to improve.

For example, if verification is taking too long, it might highlight a need to automate ID or VAT checks.

Work through each buyer journey stage with stakeholders from finance, compliance, and procurement to ensure a shared understanding of shortcomings and improvements. 

Use your findings as a roadmap to build a smooth and scalable supplier onboarding experience.

2) Establish Clear AP and Payment Guidelines

AP guidelines act as your supplier onboarding playbook. They set objectives and standards that stakeholders can use to maintain strong supplier management.

Here’s what to include in your guidelines to ensure suppliers are fully payment-ready:

Guidelines align teams on key requirements to make supplier onboarding more reliable and predictable. However, it’s important not to treat them as a one-and-done document. 

Regularly review and update them in line with company growth, onboarding improvements, and EU regulations to stick to best practices.

3) Maintain an Up-to-Date Supplier Database

A supplier database serves as a single source of truth for key information about suppliers and is an essential resource for streamlining the onboarding process.

A database is usually managed in your ERP and contains detailed records for the suppliers you work with or have worked with in the past. 

Employees can use the resource to quickly find supplier information without having to chase paperwork. They can also consult it to find out whether there’s a need to onboard a new vendor.

Seeing if an existing supplier already provides what you need helps avoid unnecessary onboarding and wasted spend.

Additionally, choosing to work with existing suppliers increases engagement and loyalty. It shows you value their goods or services and expertise.

To maintain up-to-date vendor master data, sync the supplier onboarding software with your ERP system.

For example, an onboarding solution like Tipalti uses pre-built integrations and APIs. This way, it creates an integrated workflow that lets you automate bank account validation, accurately confirm documents, process invoices according to global payment rules, and track payments within a single system. 

Connecting Tipalti to your ERP (such as Microsoft Dynamics or Oracle NetSuite) gives teams access to real-time, synced supplier and payment data.

With everything on one platform, employees can manage onboarding requests more efficiently and free finance managers from redundant approvals.

4) Brief Suppliers on Their Onboarding Requirements

Efficient onboarding starts from the moment you identify a supplier. Including a clear brief with your onboarding invitation helps you avoid frustrations or questions that might arise about supplier requirements.

Your initial onboarding email should include information on: 

• Documents suppliers need to complete onboarding.
• How to fill out contact information, payment details and expectations, and tax forms.
• How to submit an invoice to ensure timely payment.
• How to provide correct VAT details.
• How payment status notifications work.
• Expected timelines for approval and payment.
• Deadlines for completion.
• What happens when suppliers submit information (e.g., how you approve and confirm documentation).
• How to contact your team (including links to onboarding resources and training materials).

Create email templates to help standardise this process and ensure every supplier receives consistent information. 

A set template that matches your brand style and voice will save time and allow you to scale communication as your business grows.

However, it’s important to be flexible. In the same way customers expect brands to deliver personalisation, tailoring engagement emails helps suppliers feel valued.

Small touches, such as personalising emails with a supplier’s name and including specific business details, make communication less generic, building trust and boosting engagement in your process.

With Tipalti, you can create and customise templates in your supplier management hub to streamline onboarding and ensure secure, efficient communication.

Additionally, with Tipalti’s email tools, you can automatically send bill approval alerts and payment status updates from the same email address.

Maintaining email consistency creates familiarity and connection for newly onboarded suppliers, strengthening your relationships.

5) Implement a Self-Service Supplier Portal

A self-service supplier portal lets vendors submit and manage their own information—freeing AP teams from time-consuming data entry and document chasing.

The result is fewer manual errors and a streamlined process that speeds up supplier integration and payments. 

Select a self-service supplier portal that guides suppliers through the process and enables them to provide accurate information. This includes:

Tipalti’s self-service Supplier Hub makes the onboarding process faster and clearer, reducing back-and-forth communication and manual errors.

Giving suppliers the flexibility to manage their payment preferences and information boosts transparency and confidence in your onboarding process. As well as easing your AP team’s workload.

For example, the passive income app Honeygain struggled with slow, manual payee onboarding that delayed global payouts and caused data errors.

By implementing Tipalti’s automated onboarding and mass payments solution, payees now enter their details directly into the platform, enabling real-time processing, accurate data management, and enhanced compliance. This efficiency enables Honeygain to scale payouts without needing extra staff.

As this case study shows, with more of the initial onboarding tasks handled by suppliers and automation, you can minimise your team’s workload so they can focus more on experience and less on admin.

6) Track Onboarding Metrics to Improve Performance

Supplier onboarding is an ongoing process of implementing and learning alongside improvements. Monitoring how suppliers navigate onboarding helps you address friction points, measure efficiency, and make informed adjustments.

Here are some key supplier onboarding areas to track:

Then, use your insights to fine-tune your onboarding process end-to-end. For example:

• Simplify steps or forms where suppliers consistently get stuck.
• Automate manual reviews or reminders that create delays.
• Update training materials or FAQs based on the most common support requests.

By regularly reviewing and refining your process, you’ll make onboarding smoother, more compliant, and easier to scale—while creating a better experience for new suppliers.

Common Challenges in the Supplier Onboarding Process

Most supplier onboarding challenges have the same root cause: outdated manual processes. 

If your onboarding isn’t designed to scale, your current methods will get in the way of growth.

The symptoms?

• Gaps in supplier information expose your AP team to compliance risks, invoice processing delays, and payment errors. E.g., Incomplete bank details lead to failed payments, while missing VAT IDs risk incorrect tax reporting.
• Limited onboarding transparency between internal teams and suppliers creates frustration, delays, and a loss of trust in your process.
• Unclear and inconsistent onboarding steps cause suppliers to become disengaged or abandon the process. Email-based onboarding leads to higher fraud risk.
• Disorganised workflows increase human error and create additional AP work for finance teams, who have to chase suppliers and risk duplicating information.

To boost efficiency, replace manual data entry and siloed data with an accounts payable automation solution.

By automating repetitive, error-prone tasks such as data collection and approvals, you can reduce onboarding time, boost accuracy, and ease the burden on internal teams. 

The result? Faster time to value and improved compliance—along with happier, more engaged suppliers. 

Here’s how Tipalti’s supplier onboarding functions help you increase efficiency and refine supply chain management:

With the right automation solution, you’ll swap manual headaches for a process that runs with minimal human intervention, letting you scale without increasing internal headcount.

Optimise Supplier Onboarding With Tipalti

Making supplier onboarding more efficient does more than optimise AP workflows—it builds transparency in your supply chain and trust in your business.

Helping suppliers complete the process with automation streamlines data collection, keeps you compliant, and makes your business easier to work with. The result is lasting partnerships and seamless scalability. 

See how Tipalti’s Self-Service Supplier Management simplifies onboarding—giving suppliers the flexibility to manage their own details while reducing manual inefficiencies for your team.