From Vendor Compliance to Competitive Advantage: Rethinking Supplier Management Processes
From task-oriented to strategic.
by Ashley Poynter
Content Manager
PaymentWorksFrom Vendor Compliance to Competitive Advantage: Rethinking Supplier Management Processes
Supplier management used to be about one thing: compliance. Were the right forms collected? Were the tax IDs correct? Did the onboarding box get checked?
Now the landscape has changed dramatically. As vendor ecosystems grow more complex and fraud tactics evolve faster than most teams can react, organizations that treat supplier management purely as a back-office function are falling behind. Those still relying on spreadsheets, siloed tools, and manual verification processes are not only exposing themselves to risk—they’re missing out on opportunities to drive real business value.
Today, forward-thinking organizations are flipping the script. They’re viewing supplier management processes not as a cost center, but as a strategic function. The goal? To strengthen operational efficiency, improve stakeholder trust, and create a competitive advantage.
This guide explores how reimagining and automating supplier management processes can help you reduce risk, save time, and improve vendor relationships. Whether you’re in finance, procurement, compliance, or operations, this is your blueprint to move from reactive to proactive—and from tactical to strategic.
Table of Contents
Why Supplier Management Processes Are Stuck in the Past
What Outdated Supplier Management Processes Are Costing You
Rethinking Supplier Management Processes as a Strategic Function
Special Consideration: Navigating Nacha’s New Risk-Based Approach
What a Modern, Strategic Supplier Management Process Looks Like
Supplier Management Processes Unlock Business Value
Get Ready for Vendor Management Day 2025
Want Help Aligning Teams On Supplier Management Processes?
Interested in More Tips On Supplier Management Processes?
Want Personalized Guidance On Supplier Management Processes?
Why Supplier Management Processes Are Stuck in the Past
Despite digital transformation sweeping across most enterprise functions, supplier management often lags behind. It’s still far too common to see critical vendor onboarding activities managed via spreadsheets, PDFs, email threads, or homegrown SharePoint forms.
These fragmented systems create more than just friction—they open the door to mistakes, delays, and risk. Each department may have its own version of “the process,” leading to:
- Duplicate vendors in the system (or worse, payments to the wrong entity)
- Missing documentation or expired tax forms
- Slower onboarding that holds up critical initiatives
- Compliance checks that happen too late, or not at all
Ben Lao, Head of Procurement, Ryan LLC, talks about compliance gray areas and the headaches (and stress) caused by manual processes that aren’t always airtight:
From what we see at PaymentWorks, teams are often doing heroic work just to hold it all together. AP clerks double-check routing numbers in Google, procurement officers manage vendor intake via manual checklists, and compliance staff run retroactive audits that orgs should have baked in from the start.
And while everyone’s doing their best, the reality is: these outdated supplier management processes can’t scale. They add cost, introduce risk, and frustrate both internal stakeholders and vendors. Most importantly, they reinforce the idea that supplier management is just an administrative task, when in fact, it has the potential to be a driver of operational excellence.
What Outdated Supplier Management Processes Are Costing You
If outdated supplier management processes were just inconvenient, that would be one thing. But they come with a high—and often hidden—price tag.
Payment fraud and financial loss
One of the most painful costs is vendor-related fraud. Think of business email compromise scams, fake supplier profiles, or fraudulent bank account updates. Every manual form and unverified email is a potential vector for attack. We’ve seen organizations narrowly avoid seven-figure losses, and many aren’t so lucky.
Operational inefficiency
It’s not just about risk; it’s about speed. If it takes two weeks to onboard a supplier, your projects wait. Your teams wait. Vendors wait. Time-sensitive initiatives stall out, not because of technical failure, but because of clunky onboarding. Listen to Hannah Kanouff, Vendor Management Coordinator for the Office of Central Procurement at Penn State University, speak to the woes of manual verification:
Reputational risk
Suppliers remember their onboarding experience. If it’s disjointed, confusing, or repetitive, you risk damaging trust. Worse, if you onboard a vendor who later turns out to be noncompliant or unstable, your organization is on the hook—not just legally, but reputationally.
Audit pressure
When you spread supplier documentation across inboxes and file drives, audit season becomes audit panic. Missing files, inconsistent records, and unlogged approvals add stress and red flags.
Modern supplier management isn’t just about risk mitigation—it’s about operational readiness. It’s about creating the confidence that your systems, people, and partners are aligned and protected.
Rethinking Supplier Management Processes as a Strategic Function
So what happens when you stop treating supplier management as an administrative task, and start treating it as a strategic capability?
Everything changes.
Supplier onboarding is more than just data collection. It’s your first touchpoint with a vendor, and it sets the tone for the entire relationship. Done well, it builds trust. Done poorly, it creates tension.
In a world where speed, trust, and agility are everything, supplier management processes need to evolve into something smarter. That means:
- Setting expectations upfront: Clear, centralized onboarding helps suppliers know exactly what’s expected, when, and why.
- Reducing internal friction: Automated workflows eliminate the email ping-pong and free up teams to focus on value-added tasks.
- Enabling vendor success: A streamlined experience means suppliers can get up and running faster, with less confusion and fewer errors.
Strategic supplier management also aligns finance, procurement, and compliance teams around a shared goal: reduce risk while driving operational value. It breaks down silos, enforces consistency, and makes cross-functional collaboration easier.
We’ve seen organizations transform this mindset and reap the rewards without needing to rip and replace their entire infrastructure. By introducing automation where it matters most (bank account validation, TIN matching, document collection), you can modernize gradually while delivering immediate results.
When supplier management processes are well-run, they don’t just “keep the lights on”—they accelerate your business.
Special Consideration: Navigating Nacha’s New Risk-Based Approach
If your supplier management process includes ACH payments—and let’s be honest, it probably does—there’s a big regulatory change you need to have on your radar: Nacha’s new rules around risk-based processes for verifying vendor bank information.
These are some of the most significant updates in the ACH network in two decades, and they’re a direct response to the rise in sophisticated fraud schemes, particularly business email compromise (BEC) and vendor impersonation. The new rules shift the burden from “do your best” to “prove your process works.”
What’s changing?
Starting in 2026, Nacha will require all non-consumer originators—meaning businesses and public-sector organizations—to implement a risk-based process for verifying bank account details when initiating ACH payments.
That phrase—“risk-based process”—is key. Nacha doesn’t prescribe a one-size-fits-all method. Instead, organizations should aim to:
- Segment payments into risk categories
- Develop appropriate verification controls based on that segmentation
- Use validated sources to confirm bank account changes
- Maintain consistent documentation and auditability
Gone are the days of verifying changes by email or trusting a phone call without backup. Those practices simply don’t cut it anymore.
Why it matters for supplier management
Manual vendor onboarding processes—especially those relying on spreadsheets, email chains, or internal judgment calls—are highly vulnerable under the new rules. And while automation isn’t strictly required, Nacha makes it clear: for most organizations, it’s the only scalable, sustainable option.
If your organization originated over 6 million ACH transactions or received over 10 million in 2023, compliance kicks in by March 20, 2026. Everyone else? June 22, 2026. Either way, the time to act is now.
Where automation comes in
Given the upcoming changes, automation has become critical. Ideally, organizations will be able to leverage a platform that:
- Provides a turnkey risk-based process for vendor onboarding
- Validates bank account ownership against authoritative sources
- Monitors payment activity in real time
- Offers out-of-the-box ACH risk assessments
- Indemnifies customers from fraudulent payments
Nacha’s updated standards are a wake-up call, but they’re also an opportunity: by automating risk management, you reduce compliance stress and create a stronger, safer supplier experience.
What a Modern, Strategic Supplier Management Process Looks Like
So, what does great look like? Here are the hallmarks of a supplier management process built for 2025 and beyond:
Centralized Onboarding with Role-Based Workflows—No more ad-hoc forms or shadow spreadsheets. A single, secure portal where suppliers submit their information, configured with role-based workflows so that finance, procurement, compliance, and legal only see and act on what’s relevant to them.
Why you win: This not only improves clarity and efficiency but also standardizes the treatment of every supplier.
Built-In Compliance and Validation—Modern platforms should automatically run TIN matching, OFAC screening, and sanctions checks before any payment or engagement occurs. No more relying on someone to remember to do it manually.
Why you win: Bank account validation ensures that the person requesting a change is authorized to do so and that the payment is going to the right place. When this is baked into the process, not tacked on afterward, risk goes way down.
Real-Time Data and Monitoring—Supplier information shouldn’t be static. A best-in-class system monitors for changes, including address updates, banking changes, or new red flags. It should also alert the appropriate stakeholders.
Why you win: This is critical for long-term vendor relationships, especially with recurring payments or ongoing engagements.
Seamless ERP Integration—A strategic supplier management process doesn’t live in isolation. It connects directly with your existing ERP or procurement systems to ensure clean, accurate data from the start, eliminating double-entry and reducing errors downstream.
Transparent Audit Trails—Every step of the onboarding and verification process should be logged and searchable. This makes audit season easier, simplifies internal reporting, and helps prove compliance with evolving regulations.
Why you win: When supplier management processes are modern, centralized, and automated, they become a source of strength.
Supplier Management Processes Unlock Business Value
Organizations that continue to rely on fragmented, manual processes will remain vulnerable to fraud, inefficiency, and reputational harm. But those who modernize? They’ll onboard vendors faster, respond to risks quicker, and create a smoother, more trusted vendor experience.
If your current supplier management processes feel more like an obstacle course than a strategic advantage, now’s the time to take a closer look. Where are the bottlenecks? What are the risks? How could automation drive the most impact?
At PaymentWorks, we believe supplier management should be simple, smart, and secure. And we’re here to help you make the shift—from reactive to proactive, from compliance to competitive edge.
Get Ready For Vendor Management Appreciation 2025
The Vendor Management Appreciation Day (#VMAD) celebration continues in 2025! And you should join us.
Why? Because there’s no expiration date on honoring one of the most important, under-recognized roles across industries: vendor management.
Join us in observing Vendor Management Appreciation Day (VMAD)! We’re gearing up for the 2025 celebration, and we want you to be a part of it!
VMAD is a new holiday geared toward unifying vendor management professionals and celebrating innovation in the field.
Moreover, we’ve released gifts each month to help you supercharge your vendor management efforts. Additionally, we’re planning some awesome events so everyone can connect and celebrate the important, strategic role of vendor management.
In the meantime, learn more here, and grab some free vendor management goodies.
Want Help Aligning Teams On Supplier Management Processes?
Explore our blogs below. They’re filled with action items you can implement right away.
Nacha’s Upcoming Rule Change: What You Need to Know
The Hidden Costs of Not Having a Vendor Information Portal
A Complete Guide to Prevent Payments Fraud
Cleaning Up Vendor Information Management for 2025
Interested in Regular Tips On Supplier Management Processes?
Want Personalized Guidance On Supplier Management Processes?
