Transcript
Welcome and thank you for joining us for today’s webinar and demonstration. Today’s event is sponsored by VendorInfo. My name is Mark Brousseau, president of Brousseau and Associates. I’ll be one of your co-presenters for today’s event. I’m pleased to be joined today by Phil Binkow, CEO of Financial Operations Network, the owner of VendorInfo and Invoice Info. Welcome aboard, Phil.
Thank you so much, Mark. Thanks for being here. Hello, everybody. Likewise. Few tasks are as burdensome, time-consuming, and error-prone as the process of onboarding suppliers into your organization. Not only is it a drain on your resources, but it also creates lots and lots of risks. During today’s webinar and demonstration, we’ll talk about those challenges organizations face and provide you with one solution, a self-service supplier portal. We’ll show you four ways that a self-service supplier portal can streamline and automate your entire vendor onboarding process.
And that’s where we start when we think about what goes into onboarding a supplier. Well, even just the thought of it can be overwhelming. In order to be sure we have a payable supplier, we’ve got to collect, manage, and validate a lot of information. Things like a tax identification number, bank account details, ownership of the organization, who our contact is, and even their business address. What’s more, none of this is written in pen. Over time, it’s likely that this information changes. What does that mean? Well, not only is your vendor onboarding process burdensome now, but you’ve also got to have a way to manage the inevitable changes over time.
So how do most organizations handle all of this? Well, typically it’s a hodgepodge of semi-automated processes and systems. Many of you still rely on paper forms. Some of you have deployed electronic forms to help collect some of this information. Some organizations rely on their ERP, those enterprise systems that were never really built for this task. And some organizations go about trying to build their own homegrown solution.
So how are we doing with all this? Well, put it all together, and we find that in many cases, the vast majority of organizations have a process that costs too much, takes too long, creates too many errors, and invites too many risks and too little visibility. In fact, today only about one quarter of all organizations have deployed technology built to automate the supplier onboarding process. So what does this mean to you, the folks listening in today? Well, for starters, your staff is wasting lots and lots of time. You know the drill, one piece of data could be handled and ultimately re-keyed multiple times. And each of those handoffs introduces time. And it also introduces risks of errors and lost information.
And that’s the second thing our staff waste time on. They have to chase down this information. We rarely have visibility to where things stand all across the process. And so what do we do? We get engaged in back-and-forth phone calls and emails to see where things stand in the process. And it’s gotten even harder now that our staffs work remotely. Now we have the challenge of trying to be able to chase down internal staff as well as our suppliers. We also have lots and lots of errors. Each step along the way introduces opportunities for data to be miskeyed, mishandled, or lost. And so now we have the risk that the information we have isn’t even right.
And ultimately, with all of these inefficiencies I just described, your suppliers are gonna start to get anxious. All they want to do is get you the goods you need to keep your supply chain running. But that’s hard to get them onboarded. So what do they do? They call, in some cases, they get frustrated because they’re asked to supply the same information multiple times to multiple people. Isn’t there a better way? They wonder. What’s more, if the process takes too long, well, there’s the risk they could just walk and say, this simply isn’t worth it. After all, you wanna be a business that suppliers want to do business with.
We also find that there’s lots and lots of risk associated with this semi-automated process I’ve just described. For instance, think about how say sanctioned screening is done. In many cases, organizations are relying on manual or semi-automated processes in order to do sanction screening. One slip-up, one thing that gets through the cracks could leave your organization open to penalties, sanctions, and reputational damage. Similarly, most organizations are doing TIN matching in a manual way, which consumes time and creates lots and lots of risk. Nobody wants to run afoul of the IRS.
We also find that this process has lots of challenges in terms of getting visibility into our supplier data. All that keying, all those handoffs I described. Yeah, that’s gonna create challenges downstream in those ERPs that you’ve probably spent millions of bucks on. You’re gonna have incorrect vendor master data slipped through the cracks, and we know that can result in incorrect payments or misrouted payments or even reporting issues. You also have a higher risk of duplicate invoices, and that means duplicate payments, the kind that chip away at your profitability. It’s also harder to know where things stand in the process, whether that’s onboarding your suppliers or even knowing about the status of invoices.
And these days, it’s harder to be able to track diversity programs such as ESG compliance and increasingly important priority for your boards of directors and c-suite executives. If you’re trying to collect and manage that information in a manual fashion, that can be very difficult. And as I suggested earlier, suppliers aren’t thrilled with any of this. You probably can think of a few cases right off the top of your mind. And when we have strained supplier relationships, well, now that’s going to impact our business in the ultimate way. It’s gonna drive up our costs. Suppliers are not gonna give you most favored nations pricing on goods when it’s difficult to work with you. They’re not gonna extend you the best service level agreements. In some cases, inefficiencies in the way we onboard and manage our suppliers can cost us a valuable supplier. And if there’s one thing we’ve learned in the past three years, it’s that our supply chains matter a lot. And what’s more, when we lose suppliers or we take too long onboarding key suppliers, well, now there’s the chance of disrupting our supply chain. And at a time when global supply chains are already unpredictable, to put it charitably, well, we can’t afford any of that.
And so that’s the reason that more and more organizations are deploying self-service supplier portals. These are online technology that automates the process of collecting, validating, storing, and serving up information on our suppliers. As Phil’s going to show you in just a moment, a self-service supplier portal can automatically request the necessary information from a supplier. It can ensure that all of that information’s been collected before suppliers move to the next step in the process. The technology then validates that information so that things like TIN matching, bank account verification, and even sanction screening can be done automatically and, importantly, flawlessly. All that information will be managed in a way that can be easily accessed, not only by your procurement and accounts payable teams, but even by your internal auditors to make sure everything is working in the right process. And key stakeholders can have authorized access to this information 24/7/365 so that insights can be available at their fingertips when and where they need it.
You better believe that a supplier portal changes the way that suppliers are onboarded. For number one, it saves a tremendous amount of time at every step along the supplier onboarding process. To put it simply, a supplier portal eliminates the friction that bogs our AP and procurement teams down and frustrates our suppliers. A supplier portal also helps us avoid the significant costs and risks associated with manual and semi-automated onboarding processes. It helps strengthen our relationships with our suppliers. It’s an experience that sets you apart from your competitors and gets you off on the right foot with your key suppliers. And with a supplier portal, you can be sure that your data is of the highest quality. Suppliers are able to verify the information they’re keying in is correct—who knows their information better than they do. What’s more, by validating the information along the way, we’re able to immediately flag information that isn’t quite right. And having electronic feeds between systems such as a seamless integration to your ERP ensures that there’s no chance for information to be miskeyed when it gets downstream.
There’s no question that more and more businesses are looking for these types of benefits. Today, about 40% of organizations use a self-service portal to collect and validate information from their suppliers. Another 40% of organizations say they plan to deploy a portal within the next 18 months. If your organization doesn’t already have a portal or if it doesn’t have plans to deploy one, there’s a good chance you could fall behind your competitors. You wanna find ways to be able to drive better business outcomes and better relationships with your suppliers. But don’t take my word for any of this. I’m gonna hand it off to Phil now to give you a demonstration of one self-service supplier portal, the solution that’s offered by Financial Operations Network’s VendorInfo.
Well, thank you all for being here. The VendorInfo self-service portal is very easy for your vendors to use. I’m gonna walk you through how it works. Your instance of this would look like your company. For example, Adobe is a customer, and their portal is branded and looks like Adobe. The same thing would be true for other customers as well, such as MasterCard and Coca-Cola and Holland and Knight. In our demo version, what happens is the vendor actually gets a little email that invites them to come to your version of your vendor portal. There’s messaging on there that can be customized. They click on this little link, which brings them right back up to the portal. I won’t go through all the login right now, but they would register, just in the interest of time, with a user ID and password. Then they would see this screen that allows them to start entering or putting in their information.
They can enter their information. If you have a vendor onboarding form, your exact vendor onboarding form can be put on here. This can be customized with dropdown buttons for information. You can categorize your vendors any way that you like. The vendor would go ahead and sign here, and they would submit this. They can enter their banking information either on the same form or on a separate form. Essentially all the information that you want them to provide for you. They can fill out a W-9 if they are an international vendor, and they can sign this, of course. If they’re an international vendor, the system actually has a wizard that walks them through the different questions they have to answer to pick the right W-9. And I know I don’t have to tell you all this, but W-8s, there are so many W-8s, and sometimes it’s hard for the supplier to pick out the right one. The wizard walks them through, it helps them pick out the right W-8, and then it also walks them through the W-8 so that they fill it out appropriately for their particular product or service.
In addition, let me just go back over here. In addition, once that information is… Oh, and the vendor can also upload additional information if you want, such as insurance certificates or diversity certifications or checks. They can be prompted to enter any additional type of information you want, and those prompts can really be specific to different types of vendors if you break them out that way.
Once the information is entered, it automatically gets verified, and your authorized administrators can automatically look at what has been submitted and the verification on that. For example, banking information is verified for ownership. Green is good. Everything that comes up green is good as far as ownership is concerned. I’ll show you one that didn’t come up so good. Crazy Jim’s Pizza. The bank account was okay, but there were errors in the address, the city, state, and zip. These are color-coded based on the level of discrepancy. There are eight points for verification of bank account ownership, including the routing number, the account number, the company name, the address, the city, state, the zip, and the TIN. If any of those don’t match perfectly, then you get an alert or a warning. If they do match, they all come up green.
In addition, the system checks for taxpayer identification numbers. It checks for addresses. It verifies various sanctions lists such as OFAC, EU, UN. If you are in healthcare, it will also check OIG lists for you, and it also does excluded entities and excluded parties lists. There’s about 35-40 different checks and different lists that the system actually validates on automatically. If you see any errors or discrepancies, your folks can click on the little email icon, and an email will be brought up to the screen to your admin screen, and you can ask them to clarify the information, maybe verify the taxpayer identification number or the address. In this particular case with John Smith, everything was pretty good, except there was a possible discrepancy in the address and an invalid TIN. Maybe he made a typo or some other error. This allows you to get back with them really very, very easily.
Once that information is reviewed, it can be verified using the same workflow rules that you use internally today if that’s what you’d like to do. Some customers have one path for workflow and a couple of different approval levels. We have customers who have literally dozens of different approval levels depending on the division of their company, the operating unit, or the department involved. Each of those paths can have multiple different levels of approval. All of that is accommodated and configured into the system for you.
One of the cool things, and this is something that Mark mentioned a few minutes ago, is everything that anybody does is tracked by the application. You can see all of your staff and what they’ve done. You can see what your vendors have done, what they did, and when they did it. It gives great audit trails and provides another whole level of security.
What’s happened here up to this point is the vendors have entered information into your instance of VendorInfo, and they have not sent you any emails. As Mark mentioned earlier, the problem with emails is that emails weren’t really initially designed as secure communication means, and it’s really a favorite target for folks who engage in business email compromise. This eliminates those attempts because those emails are just not happening. Your folks get the information, it’s right here, and you can review it internally and not even have to send emails back and forth to other folks who are approvers in the organization.
Once that’s done and it’s approved and it goes through the appropriate workflow, these little boxes are checked, and it can go right into your ERP system, eliminating the data entry and yet another chance for errors and another pain point for most folks. So, in summary, what’s happened is the vendors come to a very easy-to-use application where they fill out the appropriate forms that you would like them to fill out, W-9s, W-8s, their banking information, your vendor information forms. They don’t do this with any email at all. You have a record of where everything is in the process. You know what a vendor has submitted and what they haven’t submitted, so you can just ping them with a reminder notice to come back where they’d still come back and log on. Once it’s in the system, it gets verified automatically.
You can see, just make sure that the bank ownership is where you want it to be, the TIN is right, the address is right. Any other items that you want to get verified are actually taken care of. It goes through your internal review process, keeping audit trails all the way, and then it automatically gets entered into the ERP system.
Mark, at this point, you may have a question, or perhaps some folks in our audience have a question that they’d like to ask.
That sounds like a great idea, Phil. We’re gonna enter the Q&A portion of this presentation. If you haven’t already submitted your question for Phil, or if you’ve thought of another question for Phil, go ahead. Use the Q&A or chat tool on your screen to submit your question to me. I’ll answer as many questions as time allows.
Our first question, Phil, one of our attendees wants to know what’s involved in integrating this with their ERP?
Great, great question. This is an ERP-neutral application. I’d say about 80% of our customers are using two of the major ERP systems, SAP or some version of SAP, or Oracle. The other 20% use a wide variety of ERP systems from SAGE to Microsoft Dynamics to, in some cases, very specific ERP systems for their particular industry. But it doesn’t really matter to us. VendorInfo is friendly and talks with everybody.
Another of our attendees wants to know more about the bank account verification capabilities that you and I spoke of.
Sure. The application goes out to the US national database of bank accounts. Early Warning owns that. Early Warning is itself owned by seven of the major banks, JP Morgan Chase, Bank of America, Wells Fargo, PNC, and others. They’ve combined their commercial and consumer bank accounts, plus the bank accounts of hundreds of other banks that want to be part of the national database. That database gives us the means to go in and verify ownership based on the routing number and the account number. By the way, if you’re doing any kind of prenote or penny test, you won’t have to do that anymore. In addition to the routing number and the account number, the data verification points include the company name, the address, the city, the state, the zip, and the taxpayer identification number. All of those have to match in order to get a go.
Tamika wants to know what is the percentage of suppliers willing to access the portal when it’s not mandated within an organization?
Well, that’s a great question, Tamika. We find that anywhere from 90-95% of all the vendors, whether they’re new vendors getting onboarded or folks making profile changes, come to the portal first. To get onboarded, they are sent the email that tells them… Hold on for one second. Mark, can we put our contact information up on the screen too?
Can indeed.
Their first introduction is an email with a link that brings them back to the portal where they register. What we’re finding is, as more and more folks who are internet-savvy enter into the workplace, they don’t really want to call people. They don’t really want to talk to people. If they can go to a portal, which is what they’re used to doing, they use it, especially if it’s really easy to use, which this is. There’s always going to be some folks who either don’t know about it or forgot about it, or prefer to try to reach out to somebody in the company and send them their information. If you discourage those guys, you’ll get closer to 100%. But I would think that… We haven’t done business with the folks on this particular call, but with our current customer base, we know that they’re getting 90-95% compliance. I would think that you would too.
Raj wants to know more about your TIN matching.
Good question, Raj. TIN matching goes against the IRS database, and it matches both employer identification numbers, and it matches against the IRS data or the social security database for social security numbers as well. It’s as up-to-date as the IRS database is.
Susan wants to know how long does it take to deploy a solution like this?
Good question, Susan. Everybody’s scope of work is a little bit different. Folks who have a very simple application with maybe a few forms and one or two different paths in for verification, that might take 30-45 days. Folks who have a very complicated application, that could take maybe 30-75 days, maybe 90 days on the outside. When we’re talking to you, we can give you a real good assessment of what that implementation timeline would be.
A second question from Susan. This time, she wants to know, can you support our existing workflows?
We do support your existing workflows, and you may be asking that because possibly your workflows are fairly complex. We’ve had folks with literally dozens of paths, dozens… Well, maybe not dozens of approval levels, but anywhere from five to eight, ten different approval levels on any given path. So if you can explain it, we can do it.
Phil, that’s our last question. What would be your single biggest piece of advice you’d give to the folks who might be interested in evaluating self-service supplier portals? What should they be looking for?
Well, that’s a great question. Certainly give us a call, reach out to us at the contact information, but making sure that you understand what it is that you’re currently doing and how your process works. The sooner you do that, the better. We’ll help you through it and help. We have a list of questions that can help people really identify what’s going on in their own organization because often there are… Unless you’re involved with onboarding a supplier or receiving information for a profile change, if you’re not involved in that, it’s really difficult for somebody to understand how many people are actually involved. When you have the person who’s managing the supplier relationship, the supplier themselves, different divisions who could be involved, different departments… A lot of people touch a lot of things. We have a little flowchart tool that actually helps folks visualize exactly what they’re doing. I think that’s the first step. Then the next step is once you look at that, actually review how you would like it to work and any changes you would like to see. Then, of course, when you’re able to see how your work would appear in the portal and what the workflow would look like, you’re really able to gain some visibility into how this would work and determine what it would offer your organization and make a decision as to whether you think it’s a good step to take.
Phil, we had another question come in from Tamika. She wants to know how long does it take to deploy your solution if we happen to be using SAP’s ERP?
Good question, Tamika. It’s not really ERP-dependent, so it doesn’t matter. It will really depend on the scope of work, what you have your vendors doing today, and how many approval levels you have, what the different paths are. Simply, if it’s pretty straightforward, you can have it up and running in 30 days. If it’s fairly complex, maybe 30-90 days. But it isn’t ERP-dependent.
Mark: That will be our final word. Phil, thanks so much for an excellent presentation and for sharing your insights with us today.
Thank you, and thank all of you for taking time out of your busy days to join us.
Mark: If you’d like more information on the supplier portal that Phil demonstrated today, or if you’d like to take a deeper dive into a demonstration, please email Phil at pbanko@vendorinfo.com. You can also find more information about VendorInfo and Financial Operations Network at vendorinfo.com. On behalf of Financial Operations Network, this is Mark Brousseau. Thanks so much for joining us, everyone. Look forward to speaking with you again soon.