Top Takeaways From Forging an Elite Vendor Management Team

by Ashley Poynter

Content Manager

Top Takeaways From Forging an Elite Vendor Team: A Conversation About Investing in Vendor Management

It’s 2024. Time for a resolution or three. Our suggestion? Pay attention to your vendor management team and process, and give both the resources needed to succeed.

At the end of 2023 we hosted a live event with Debra Richardson of Debra Richardson, LLC: “Forging an Elite Vendor Team: A Conversation About Investing in Vendor Management.”This enlightening conversation and all-around good time gives you the blueprint for how your organization can fortify your vendor team with the right tools, support, and mindset to meet the challenges awaiting them in 2024.

We’ve summarized the top takeaways below!

Top Takeaways on How to Forge an Elite Vendor Management Team

Vendor onboarding and management is not data entry
Valued vendor management teams are the key to unlocking organizational value
Standardization and authentication are foundational
Get proactive with data clean-up and compliance
Uplevel your elite vendor management team with automation
Let automation transform your role from passive (clerk) to active (auditor)
Don’t know where to start? Best place: “Write it down”

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Top Takeaways on How to Forge an Elite Vendor Management Team

1. Vendor onboarding and management is not data entry

Continuing to look at vendor onboarding and management as just “data entry” in 2024 will be a colossal mistake. Unfortunately, I bet this is how your vendor desk is viewed. The result? No investment and continuing with the status quo of manual processes and tasks, leaving the door wide open for mistakes and fraud.

What’s more, manual tasks are time- and resource-draining, with no organization-wide visibility, leaving the vendor desk with no time to be proactive.

Go ahead – ask your team how many questions they have to answer every week regarding the status of a vendor onboarding or payment. Spoiler alert: it’s a lot.

So they spend time responding to vendor inquiries. And so do the business folks who work directly with the vendors. And without standardized processes, do you know what they are saying? I’ll bet they all say different things in response to these inquiries.

And what about the sheer volume of new vendor additions each day/week/month? These typically require relying on documents received via email (risky!). Your team needs to decipher and input all of that information. This process is rife with opportunities for simple, old-fashioned mistakes. And yes, internal and external fraud threats as well!

Let’s not forget the work required to maintain vendor data and keep it valid. That means processing change requests, revalidating data, and continuously monitoring for changes on watch lists and updates to regulatory requirements.

A team mired in manual upkeep is not able to be proactive about these things, as Debra aptly points out below:

2. Valued vendor management teams are the key to unlocking organizational value

Arming your team with the right tools and training can yield unbelievable results.r The University of Tennessee, a PaymentWorks customer, is an excellent example of how valued teams deliver additional value.

Using automated vendor onboarding and management as a shared service allowed the institution’s vendor management team to act as the central point of contact for all vendors across all departments on all campuses.

Their ability to audit and consolidate spend management while boosting negotiation power made the team so valuable they, brace yourselves, were given a budget to add another team member!

The value of the work they were able to do proactively led to an increased investment in the team!

It’s a success story for vendor management teams everywhere to aspire to emulate. The challenge? The work is often not respected as it is at UTenn.

That “clerk” and “clerical work only’ mindset introduces a whole slew of problems. Here’s one: you’re now competing with Taco Bell for your employees. Shockingly, those QSR team member roles give the vendor desk a run for its money when it comes to pay, perks, and benefits.

That means the people guarding your company’s gold are getting paid the same as a fast food employee.

Debra points out the faulty rationale for this below:

Food for thought. (Yes, pun intended.)

3. Standardization and authentication are foundational

Your 2024 elite vendor management team will need to be built squarely on standardization. Even if your team starts the year still relying heavily on manual tasks, by documenting desktop procedures, and a vendor policy, and revisiting job titles more reflective of their responsibilities (i.e., “analyst” instead of “clerk” or “admin”), your foundation will be stronger.

You also need a documented vendor data authentication process (like this one!). The vendor desk needs to confirm who they’re speaking to or emailing is the vendor or internal team member, not a fraudster.

Debra says this makes it much smoother to process vendor adds and change requests via email because everyone has standardized desktop procedures and enters vendor data the same way in the system. Better yet, if they’re collecting data on digital forms with built-in authentication.

“Great example is if they want to change vendor banking”, advises Debra, “instead of just putting new banking on it, you also ask for the existing banking. So when you get that form, you can now compare the existing banking on the form to the existing banking on the vendor master file.”

And do it with remittance addresses as well to prevent ever-increasing check fraud.

The key is ensuring that when that information gets into your vendor master data, it’s valid.

Pro tip: shore up your vendor management process by inserting the question somewhere that makes them validate existing information.

It’s placing one more hurdle in front of bad actors that many will be too lazy to jump over.

4. Get proactive with data clean-up and compliance

Once the processes are in place to increase assurance that the vendor data entered into the vendor master file is accurate, it needs to be maintained. The good news? Clean data from the start means less clean-up later on.

But don’t forget to revalidate that information! With crisp, clean vendor onboarding procedures, your team will have the time to be proactive and do this regularly.

Debra reminds people that they should also mark vendors as inactive where appropriate. More active vendors mean greater susceptibility to both internal and external fraud. Even chipping away at old vendors monthly can eliminate fraud vectors for your organization.

Since you’ll probably still have a little free time (see how far the right policies and procedures can take you?!), use it to keep up with regulatory changes proactively. Whether updating your Transmitter Control Code (TCC) to file electronically with the IRS or responding to new operating rules from Nacha, you can get ahead of the game rather than playing catch-up.

5. Uplevel your elite vendor management team with automation

Even with the right policies and procedures, manual tasks can slow your team down and open the door to additional fraud risk.

An automated vendor onboarding platform that allows vendors to own their information and how it gets entered into your system can turbocharge the vendor desk.

We’re not talking about a traditional ERP-designed supplier portal. With little to no automation to authenticate the input data, those are just giving your team an expensive PDF that still leans on a lot of manual labor. We mean an automated platform with authentication built-in.

Here’s the reality: while you’re spending maybe 10% of your time (a generous number for a team burdened with manual admin tasks) focused on stopping fraud, fraudsters are spending 100% of their time focused on how to trick you.

“Studies have shown that IT can block about 85% of [fraud attacks], but 15% are still going to get through,” Debra says.

Vendor management teams rest easier with automation. They no longer lie awake wondering if they will be the ones tricked into handing off millions of dollars to a fraud.

6. Let automation transform your role from passive (clerk) to active (auditor)

Another neat benefit of automation is that it drastically (if not entirely) reduces the number of phone calls and emails the vendor desk is tasked with answering. Instead, everything funnels through a secure, automated portal. With a window into the status of ‘where’ the vendor is currently in the onboarding and/or payment process, vendors and internal parties can log in to see for themselves.

Why does this matter?

Because the vendor desk immediately transforms from a team of clerks responding to constant ‘where’s my ____’ inquiries into a powerful team of auditors that can closely monitor exceptions.

Debra walks us through the impact this type of change can have on an organization:

Sidebar: if you’re looking for a great way to document the exceptions, grab our free template here.

7. Don’t know where to start? Best place: “Write it down”

A robust, insurable vendor onboarding and change management policy is critical (shortcut: use this template to get started).

A vendor policy is different from desktop procedures. Desktop procedures tell your team how to perform tasks in a standardized way. A vendor policy tells everyone how you do business with the vendor team.

In other words, it outlines requirements for a vendor addition or change, calls out when and how to inactivate vendors, identifies internal controls, and outlines responsibilities by position. It’s a great tool to get buy-in from leadership – and to avoid requests for risky exceptions down the road.

Bonus: you can give this to your insurance company so they know what procedures you have in place to prevent fraudulent payments. (Insurance companies love it when you write it down- our partner Chubb has a version of our Write it Down Template here.)

Writing things down also helps shape culture – and company culture is a crucial risk factor.

If the person at the vendor desk believes that someone above them would ask them to break policy “just this once,” your organization is at an increased risk of being tricked into paying a bad actor.

A culture of exceptions is a culture where fraud thrives.

This is why documenting the exceptions can be helpful, too. It can help identify patterns of behavior that are putting an organization at risk.

Get Ready For Vendor Management Appreciation 2024

It’s time to stop losing sleep over vendor risk. We think you should let loose a bit and join us for the party of the year! While it might be too late for 2023- the spirit of the day lives on all year long.

It’s time for everyone to unite in honor of one of the most critical, under-recognized roles across industries: vendor management.

VMAD is a brand-new holiday geared toward unifying vendor management professionals and celebrating innovation in the field.

We’ve released gifts each month to help you supercharge your vendor management efforts. We’re also planning some awesome events so everyone can connect and celebrate the important, strategic role of vendor management.

Learn more here, and grab some free vendor management goodies.