As businesses grow and expand, so too does the list of suppliers they do business with.
Even small and medium-sized businesses can have dozens or even hundreds of active suppliers.
The tricky part is that managing a supplier relationship takes work. It's not the same as going down to your local supermarket and picking up a six-pack of eggs.
Good vendor relationship management requires regular performance management meetings, a solid contract management process, and the orchestration of various important documents like purchase orders and invoices.
One of the ways that many procurement leaders choose to solve some of the challenges that come with managing a diverse set of vendors is through what is known as a supplier portal.
In this article, we’ll explore the ins and outs of using supplier portals to manage vendor relationships. We will explain what supplier portals are and what they do, the key features they offer, and the five most important benefits captured by using one.
What is a supplier portal?
A supplier portal is an online platform that is shared by businesses and the suppliers from which they purchase goods and services.
Also known as vendor portals, supplier portals are typically a part of the buyer’s procurement platform.
They provide a place for suppliers to enter important information such as payment details, submit invoices and other documents, fulfill purchase orders, upload tax forms, and communicate with their customers in context (such as adding a comment to a purchase order).
On the back end, companies use supplier portals to better interact with their vendors, such as requesting certain documents or formally sending over a purchase order.
What do supplier portals do?
Broadly speaking, supplier portals facilitate the communication between buyers and sellers, helping the two parties manage many aspects of the procurement process.
For example, a buyer can raise a purchase order in their supplier portal, for which the vendor receives an automated notification. They can then provide the requested goods or services and submit an invoice for payment using the same portal.
Once the purchase has released payment, they can mark the invoice as paid. This can often be automated by connecting the supplier portal with your accounts payable automation platform.
Without a supplier, much of this has to be done through traditional, manual methods.
The buyer has to call the supplier and place an order, sending over a purchase order document via email or fax. The same goes once the vendor has an invoice ready.
Naturally, the use of a supplier portal makes the whole process a lot faster and easier, especially when it comes to tracing one’s steps to identify a mistake.
What key features do supplier portals offer?
Every vendor portal offers a different set of unique features. Some may even be designed for specific industries, such as healthcare procurement solutions, and thus may include features that pertain to purchasing in that specific sector.
Speaking more generally, however, these are some of the most important features you’ll find in a typical supplier portal:
- Purchase order management. Buyers can place purchase orders and send them directly to the vendor for fulfillment.
- Order tracking. They can also track the progress of open orders, such as viewing the exact date and time that an order was fulfilled and sent for delivery.
- Invoice submission. Sellers can submit invoices for delivered goods or services directly on the platform. They can upload a PDF or integrate directly with their invoicing system.
- Real-time communication. Both parties can tag each other in comments for more contextual communication. The other will be notified in real time.
- Document management. The supplier portal acts as a form of document storage solution, where both parties can always jump back in and access previously submitted invoices or purchase orders, among other documents.
- Automated notifications and reminders. You can often set up automated reminders to be sent to your email or mobile app. For example, vendors can trigger an alert when an unpaid invoice passes its due date.
- Data integrations. Many vendor portals support direct integrations with relevant software platforms, such as CRM and ERP solutions.
- Payment tracking. Suppliers can track the status of unpaid invoices in real-time to improve cash flow management.
5 core benefits of a supplier portal
So, why consider investing in a vendor portal?
Here, we describe five important benefits of using supplier portals.
1. Increased operational efficiency
The first benefit is quite simple:
Using a supplier portal saves time.
It’s a faster way to communicate, makes it easier to locate documents (like purchase orders) when required, and uses automation to remove some repetitive manual tasks from your to-do list.
Which brings us to our next point.
2. Reduced administrative burden
The procurement cycle is full of admin.
You’ve got to produce purchase orders, get internal approval, match POs against invoices, and so on.
A good supplier portal reduces the administrative burden for both parties, reducing the overall cost of procurement (for buyers) and sales (for sellers).
3. Enhanced supplier relationships
Supplier portals improve the relationship you have with your vendors by:
- Reducing the need to follow up on orders and payments
- Streamlining communications between both parties
- Helping to eliminate errors
4. Accessible history of changes
A good supplier portal comes with a built-in audit log, which is essential for a history of actions taken in the platform.
This means that if something goes wrong, you have a way of understanding exactly how, when, and why.
Say, for example, that you receive an incorrect order from a vendor. The audit trail can help you double-check that your order was correct (maybe the purchase order was incorrect), then understand who on the vendor’s end fulfilled the order so they can rectify it with the responsible party,
5. Improved compliance
Finally, working within a supplier portal improves your document management, provides a basis for supplier performance monitoring, and can even come with some built-in risk management tools, all of which are important for maintaining compliance with both internal policies and external regulations.
How to choose the right supplier portal
Considering investing in a supplier portal but not sure which one?
Here are 5 important steps to choosing the right option for your company:
- Assess your needs. Begin by identifying your core business requirements. For example, do you need contract compliance tracking? A purchase order system? Single sign-on capabilities? List out your non-negotiables.
- Evaluate compatibility. Check that the vendor portal you’re considering buying offers native integrations with the ERP, procurement, and accounting software you’re already using or at least offers an API for custom integrations.
- Test user experience. Engage in a trial period where possible to confirm that the basic layout, functionality, and user interface are intuitive and user-friendly. The easier it is to use, the easier it will be to get your team to adopt it.
- Review security and compliance features. Ensure that any supplier portal you implement meets industry and legal standards for data protection and financial compliance.
- Consider future scalability. The best supply portal is one that will not only meet your current needs but offers features that you may grow into in the future. By choosing a tool that can scale with your organization, you’ll avoid having to migrate in the future when your business grows and develops new needs.
- Ask about support and training. Look for a tool that provides suitable support based on the level of expertise you have internally. Some organizations may wish, for example, to choose a solution with a very hands-on support team and a dedicated onboarding and implementation process.
Connecting your supplier portal to your procurement stack
A supplier portal is an important part of any good procurement technology stack.
It helps buyers and sellers interface more easily, allowing businesses to send over purchase orders, receive invoices, and manage payments.
A good supplier portal should integrate natively with your financial operations platform, forming two-way data syncs and keeping information up-to-date across all access points.
Using BILL to manage financial operations and looking to integrate a supplier portal? Check out our range of integrations here, we connect with dozens of popular software tools.
