Benefits of vendor management system for your business
Managing vendors is tough, especially if you rely on many of them for your company. But every organization knows the importance of building a strong and healthy relationship with them to grow each other’s businesses. As startups scale, they start dealing with more and more vendors, and managing all of them becomes tough, specifically processing their payments.
This is where a vendor management system for payments like Volopay becomes extremely important for your organization. Our platform allows you to create and manage vendor payouts both domestically and internationally, source invoices automatically through email/directly upload them/sync from your accounting software, and also autofill invoice fields using OCR.
The operations of every company include a vast number of activities that need to be done to gain business from customers. There will be instances where certain work must be outsourced to other businesses, also known as vendors or suppliers. This can range anywhere from obtaining raw materials for the products you make to freelancers or consultants for your organization.
Usually, this is not a one-time thing, but rather an ongoing process that requires a lot of coordination. This entire process of dealing with vendors or suppliers is known as vendor management.
The managing of vendors, especially the payments aspect of it needs to be systematic. Traditionally this was done manually by an accountant or finance team. Although it got the job done, if you’ve dealt with vendors and processed their payments, you would know that there are always chances of problems occurring in the process; errors in the invoices, invoices going missing cause late payments, and various other issues.
To avoid all of this, companies use a vendor management system to streamline their business and build a better relationship with these suppliers.
Selecting the right vendor for your business operations is a crucial task as it will decide how good your business output will be. If a vendor you choose does not comply with your standards, then it will not be a fruitful business relationship. To avoid this, companies generally try out 2 to 3 different vendors at the same time to see who provides the best service.
As established earlier, choosing the right vendor is very important. But to do that, you’ll inevitably have to go through the process of weeding out the ones who you don’t gel with you and who don’t comply with your standards. So the risk of ending up with pushed deadlines or business operations facing major roadblocks becomes another issue. This is where a company should do a thorough background check of each vendor they are about to onboard and see how their reputation has been so far. This might help to some degree in gaining confidence regarding their performance.
Managing vendors manually and dealing with them in a decentralized way will at some point cause issues due to a lack of visibility. If you cannot view all your vendor data in one place, the chances of things going wrong are higher. When the opposite is true, and you can easily manage all suppliers and vendors through one platform, it will improve the way your resources are allocated and hence increase efficiency.
Storage of data in the traditional method of vendor management which included paper invoices, contracts, and so on is tough to store. With digital tech vendor management systems in place, companies no longer need to worry about safely storing a pile of paper in a physical location as all the data can be easily accessed on the platform you use.
Lastly, another challenge that your organization may face is the different payment terms that certain vendors have. While most would follow the industry standard, there will be suppliers who would ask for a major portion of the final project cost upfront, which can be very risky.
When dealing with multiple vendors, there’s always a chance that one of them might end up causing a delay in business operations due to late shipping, sending damaged goods, or other issues. These operational problems are reflected in finances and you will be able to see the cost implications of every vendor on the Volopay platform. When you see irregularities for a particular vendor, you can investigate what went wrong and reduce the risk of such mishaps in the future by taking precautionary measures.
Since you get to see all the vendor payment information within one dashboard, the system allows you to get a comprehensive view of all the financial transactions. Add to that our platform’s 3-way invoice sourcing capability, you can rest assured that you will never miss an invoice and no vendor will go unpaid leading to late payment fees. All of this together helps reduce your costs.
An accounts payable automation system like Volopay helps you fast-track your coordination with vendors by helping your business execute quick vendor payouts.
There is no doubt, that whenever work is done thoroughly and payments are made on time, it helps you in building vendor relationships.
Using a tech platform like Volopay significantly drives down the efforts of an admin who has to keep track of all vendor payments. Overall, it increases the work efficiency of any administrative team.
An extremely simple vendor creation/onboarding process on the Volopay dashboard ensures that work can kick off as soon as the vendor accounts are created.
When making vendor payouts using Volopay, you get the ability to create multi-level approval workflows to ensure that all major stakeholders are aware of expenses being made and no payment is going out without their permission.
For example, you can create an approval workflow where any payment above $500 through the money transfer feature on Volopay must be approved by the team manager first and then the finance head of the company. So only when these two approvers have manually approved the payment request, will the money be transferred from your Volopay account.
The ‘Triggers’ feature will be loved by your accounts team. Accountants can set up specific triggers for every expense made to a vendor. They can set default accounting values to be filled for a particular vendor each time a payment is made to that supplier. By doing this, every payment made to that vendor will automatically have those accounting fields auto-filled in the expenses tab and it’ll be easier for the accountant to sync all of them to their accounting software.
Once you create a vendor on Volopay, it becomes super simple to carry out all their payments regularly without having to enter all their data every time a payment has to be made.
The 3-way invoice sourcing allows you to pull invoices from your email, the accounting software, and directly upload invoices to Volopay. This ensures that you never miss out on any outstanding payments to be made to your vendors.
Thanks to our robust financial infrastructure, you can easily make domestic and international transactions at the lowest rates which are completed within a day at max.
As a vendor management system, Volopay helps you carry out the fastest vendor payouts at the lowest rates. We incentivize businesses to make early payments to their suppliers by giving you anywhere from 3-5% cashback. Not only does this help you earn money as you pay other people, but also builds trust and creates strong vendor relationships.
Easy invoice processing, real-time payment tracking, approval workflows, and automation of accounting tasks all make vendor management a breeze for your business.
Vendor management systems are cloud-based software designed to assist businesses in end-to-end vendor management processes.
Negotiating with vendors will decrease your variable costs and increase your profit. It also improves your vendor relationships.
Having an outstanding vendor payment solution helps make AP vendor management efficient and helps companies to grow its business.