Business interactions with suppliers can be time-consuming, expensive, and frustrating. Supplier portals, which are also called vendor portals, solve many of these problems. Choose the right supplier portal for your business needs.
What is a supplier portal?
A supplier portal, also known as a vendor portal, is an integrated online platform shared by businesses and their vendors. The supplier portal is used for entering supplier information, submitting documents, displaying status, and communicating. With a supplier portal, document submission includes contracts, electronic purchase orders, vendor invoices for payment, and electronic W-9 tax forms.
A supplier portal efficiently handles shared business processes through a web interface.
Supplier portals have some indispensable features, including:
- 24×7 access to view real-time data
- Ability to update supplier information
- View history of transactions
Supplier portal basics
To understand a supplier portal, you need to know which business and procurement processes and functions the supplier portal software can handle for supplier management.
A supplier portal is used for:
- Vendor onboarding
- Electronic invoice submission
- Invoice and payment inquiry, including payment history and details
- Payment disputes – submission & tracking
- Procurement, after sourcing and solicitations
- Supply chain management
- Dynamic discounting
When a company begins doing business with a new supplier, vendor onboarding through the supplier portal begins. Businesses should furnish suppliers with links to simple standard instructions, webinars, and FAQs for using the vendor portal. Self-service vendor onboarding starts with submitting contact and terms information and creating an online W-9 (or international equivalent) tax form.
Electronic invoice submission
Vendors in your supply chain submit invoices through the supplier portal. Suppliers can be paid quicker by customers tempted to take early payment discounts with dynamic discounting. And invoices won’t disappear, delaying the receipt of payments.
On the other side of the procurement transaction, businesses providing the vendor portal can increase their payables and payments workflow efficiency. If customers use payables automation software that includes a self-service supplier portal, accounts payable and payments workflow processes are reduced by up to 80 percent.
Invoice and payment inquiry forms
Supplier portals automate manual invoice status inquiry and payment detail inquiry forms. (Sample manual inquiry forms from ABB and its Baldor company are linked.)
By automating the invoice payment follow-up process, vendors and businesses save substantial time. Vendors can access status in real-time through the supplier portal to reach accounts receivable collection goals and have better cash flow management.
Payment disputes – submission & tracking
Handling transaction payment disputes manually takes time. When you use the supplier portal to submit and track payment disputes, your business can streamline the process and resolve the issue quicker.
Using a supplier portal for your business and its supply chain, the customer procurement team and supplier team can submit or view the purchase order, request change orders, see shipping and delivery status, and get automated vendor notifications. Self-service solutions like Oracle iSupplier Portal or Oracle Supplier Portal Cloud let vendors accomplish invoicing by using detailed purchase order information. Creating an invoice from a purchase order is known as a PO flip.
Dynamic discounting is the use of early payment discounts negotiated by the buyer with the vendor depending on changing market conditions. Dynamic discounting reduces the amount due on an invoice when a customer pays by a specified number or range of days after the invoice date.
Supplier portals handle complex dynamic discounting terms better than some standalone ERP systems.
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Benefits of a supplier portal
Using a supplier portal can eliminate paper for better environmental sustainability, dramatically reduce data entry errors, and provide additional services that reduce the dependencies and resource drain on accounts payable staff.
Using a supplier portal streamlines and transfers part of the workflow to vendors, increases information accuracy, organizes submitted documents, automates processes, handles payment disputes, and improves two-way communication, including providing up-to-date status. The interruptions from constant status inquiries outside the portal can stop.
Accounts payable specialists often complain about spending much of their time operating as a ‘help desk’. Without a supplier portal and a proactive supplier payment communication system, suppliers or vendors are often left with no choice but to contact the AP department for payment-related inquiries. Rather than spending their time having a meaningful impact on the business, accounts payable staff members end up feeling like customer service representatives – dealing with the minutia of supplier payments.
The right supplier portal will automatically flag fraudulent vendors to prevent unnecessary payments.
A self-service supplier portal shifts some workflow to vendors, increases accuracy, reduces lost paperwork, resolves problems, and automatically shows the current status and supplier payment history to both parties in real-time. The result is virtually no timewasting phone tag or interruptions.
When a self-service vendor portal is integrated with an ERP system and a SaaS AP automation software add-on, manual business processes are reduced. The result is much greater efficiency and significant cost reduction from using the supplier portal. Data updates in the connected ERP system.
Online supplier portals provide secure access to data and sensitive information. The vendor portal can be used from anywhere, at any time you have Internet access.
A supplier portal that also functions as a supplier payment system can centralize supplier management and make reconciliation and reporting a much easier task.
In the same way ATMs and online banking changed banking, supplier portals offer suppliers communication, convenience, and control when engaging in business transactions.
How to achieve supplier portal success
While there are numerous excellent features for suppliers, many still need to overcome the traditional friction related to sending invoices and requesting payment. Here are some keys to making a supplier portal a successful tool in supplier information management and supplier payments.
Onboard Suppliers by Articulating Benefits
Transitioning suppliers from traditional invoice-to-pay engagements to web supplier portal interaction requires something many accounts payable staff may not be accustomed to: proactive communications. AP has traditionally been a more reactive entity due to the nature of how it interfaces with everyone. When an invoice comes in, they key that data into accounting systems or ERP. On due dates, they send out payments. If there’s a payment issue, the supplier contacts AP for clarification, investigation, or correction. Unlike a supplier portal, It’s all reactive.
With a self-service supplier portal, many of the interactions between the supplier and AP are more formulaic. The process of submitting invoices, inquiring about status are more transparent for the supplier and can be done at their convenience. At the same time, because the supplier is responsible for providing their payment and contact details, much of the data entry onus is on them, thus incentivizing them to provide the right information to get paid.
A brief, well-crafted email with some basic instructions is usually enough to get compliance from suppliers to begin using the portal. Ideally, over 90% of suppliers can interact this way, which relieves a significant burden from having to provide manual data entry and responses to payment inquiries.
Offer Localized Language Options
To expect an AP department to work in various languages is not realistic. Yet more companies are working with global providers, which presents interesting challenges.
The global supplier is a perfect candidate for supplier portals. That supplier in Madrid is not beholden to the time and language barriers that add drag to their payments if they can provide their information via a supplier portal in Spanish.
Enable supplier choice
We’ve seen dramatic adoption of self-service portals by enabling suppliers to choose their payment method. Particularly with global providers, not all payment methods suit every person or situation. If the payment amount is low, you don’t want to send funds through an expensive mechanism like a wire transfer. If the person lives in Ukraine, do you automatically know what the best method is?
Giving the supplier a choice means they can find or be guided to the most optimal method for them. It also means they can securely provide the necessary bank details to ensure accurate payment. Emailing routing and account numbers or accepting them by phone is insecure and can still result in payment errors.
Provide supplier payment workflow status
“Did you get my invoice?” “Where’s our payment?” These are the questions suppliers most often pose to their customers’ finance departments. At the same time, those questions are interrupters to efficiency. The AP person then must look up the vendor, find the invoice, query approvers, review the details, and communicate back to the supplier. If there’s an actual problem (e.g., failed payment), someone will need to solve that. Worst, the supplier might go right to the requester for status. Now you’ve taken up time from two people in the organization for a simple payment inquiry.
Any supplier portal needs to provide status regarding payment approvals, remittance, etc. – and ideally, proactively email the supplier status or notify them of issues related to their payment. That feature alone is enough for a supplier to want to engage with the portal, assuming the information is accurate, clear, and accessible.
Rethink payment runs
Many companies rely heavily on scheduled payment runs to suppliers. It makes sense since the process of payments is arduous. Walking approvals, checking against fraud, signing into banks for ACH or wire transfers, printing and sending checks, funding accounts, etc., all take up valuable time, and nearly all of it has been manual. And when it’s time to reconcile payments for financial close, that takes up even more business cycles.
But if you’re going through the process of offering suppliers visibility into payments, making payment runs once or twice a month hinders the value of the portal to the supplier. Instead, consider making payments every week (or every day) by utilizing supplier payment automation, then posting that data as it happens for the supplier to view.
Use consultants to select and implement a standalone supplier portal
If you’re evaluating and selecting a standalone supplier portal that’s not integrated into standard SaaS software, consider budgeting for and hiring a consultant with vendor portal expertise. The right consultant will lead you through the process using their experience and ensuring that you make the right customized decision. OR make a better choice…
Choose a proven supplier portal included in a SaaS software solution
When you choose a supplier portal already integrated into another proven software solution, like AP automation software, you’ll save time. And you’ll increase the likelihood of it working well from the beginning to optimize your business efficiency and effectiveness, saving labor costs.
Picking the best supplier portal for your business
When selecting a supplier portal for your business, consider the functionality that matches your business size and type, needs, and budget. The right supplier portal should increase efficiency to reduce operating costs. Look for scalability that will let you keep the supplier portal functioning as your business grows.
Create a checklist of what’s important in a supplier portal at a cost that your company can afford.
When evaluating and choosing supplier portal software, know the difference between capabilities and features on an itemized wish list and essentials for a must-have list. Check reviews and ratings for software offering supplier portals.
Planning the selection of vendor portal software can help you find the best supplier portal for your business.