Every year corporatation, nonprofits, and governments spend trillions of dollars on procuring the supplies they need to maintain their day-to-day operations. A huge chunk of that procurement spend is wasted because it’s hard to monitor the entire process to understand where improvement should be made in the supplier or vendor relationship.
A vendor management system changes that, serving as a source of truth for managing an end-to-end procurement relationship with a company and its suppliers and/or vendors.
What are the best vendor management systems in 2024?
- Airbase
- SAP Fieldglass
- Precoro
- Procurify
- Kissflow Procurement Cloud
- PRM360
- Tipalti
What Is a Vendor Management System?
A vendor management system is a software platform designed to help businesses build relationships with suppliers, procure supplies, process payments, facilitate vendor or supplier communication, and manage the entire vendor process and relationships seamlessly – all in a centralized application.
SaaS vendor management applications manage and modernize four major company-to-vendor painpoints:
- Supplier and vendor communication and relationship management
- Supplier and vendor project coordination and management
- Supplier and vendor contract and payroll management
- Supplier and vendor compliance management
Features of a Vendor Management System
Here are the key features a vendor management platform should have to be able to support your procurement needs.
1. Centralized dashboard for all things related to suppliers and vendors
A vendor management system offers a single source of truth for the entire job of managing suppliers and making decisons with data. This includes:
- Tracking previous and current purchases
- Assessing vendor risk profiles
- Analyzing supplier metrics
- Collecting payments and tax data
- Processing e-invoices
- Managing compliance
A central dashboard helps finance teams see what’s working in their procurement strategy, as well as what needs to be changed and how.
2. Vendor acquisition, evaluation, and onboarding
The vendor acquisition process is not as simple as browsing through potential suppliers and sending them a list of the products or services you need in your organization. You’ll often need to undergo a laborious process to collect quotes and proposals before you choose any vendor.
After the vendor acquisition process, businesses still need to onboard their suppliers to cooperate with them using their internal purchasing and communication workflows. A vendor management system organizes all the purchasing workflows and processes vendors need to adhere to so that they can get up to speed faster.
3. Vendor communication and collaboration
Without a healthy communication process, suppliers may deliver the wrong products, orders may get delayed, and disputes may arise. A vendor management platform can be used to communicate exactly what a customer wants for each order, the terms the supplier will supply them for, and how long these terms are applicable.
4. Contract management
Businesses of all sizes can create, review, and sign contracts inside a vendor management system. Vendor contracts state how both parties will work together, the terms of the agreement, and severance terms which will come into force if your vendors default.
A vendor management system makes it easy to create these contracts from scratch or from a template, engage stakeholders while drafting them, and manage contracts at scale using workflows.
When researching a new vendor management solution, it’s important to ensure that the tools you’ve shortlisted integrate with your contract lifecycle management (CLM) software – as well as other procurement-related applications.
5. Support for suppliers
A procurement platform can be used as a quick support channel for taking note and fixing issues raised by vendors in order to work on them before they escalate.
6. Data archives and integrations
Your vendor management platform serves as a source of historical data on every transaction, issues, and decision that’s been taken on supplier issues. Similarly, vendor management platforms can integrate with third-party finance and operation tools like Xero, Slack, and Quickbooks.
This helps finance and ops teams automatically data between different platforms and make decisions faster.
7 Best Vendor Management Software in 2024
Here are seven of the best vendor management software vendors to research in 2024:
1. Airbase
Airbase is a spend management platform that doubles as a vendor management solution. The product combines accounts payables, expense reimbursements, and expense cards into a finance platform designed to help teams of all sizes manage non-payroll spending.
Among others, Airbase offers:
- Physical and virtual expense cards with custom rules and spend limits
- Accounts payables for managing the entire procurement process from procurement to payments
- Integrations with third-party acocunting tools like Xero, QuickBooks, and Sage
- Advanced approvals that offer visibility into every transaction
- Purchase ordering, user maagement, and custom fields for customzing the vendor mangagement experience
Airbase goes beyond an expense card product. It’s a technically advanced vendor management platform finance teams can use to track multiple suppliers, vet their invoices to eliminate fraud, make payments easily and on time, and control the entire procurement process from one sourc eof truth.
2. SAP Fieldglass
SAP Fieldglass combines a vendor mangement system and a talent management platform into a product that helps vet potential hires, choose the right candidate, and pay freelancers and contractors.
The SAP Fieldglass platform helps finance teams to:
- Manage freelancers and contractors, including logging timesheets, processing payments, and vetting invoices
- Track external talent with milestone-based payments, attendance tracking, budgeting, time tracking, fixed and recurring payments, and in-depth auditing to avoid fraud
- Approval workflows for vetting transactions
- Integrate with third-party applications in the procurement stack
By all indications, SAP Fieldglass comes in handy when your orgaizations depends a lot on freelancers, contractors, and agencies for a significant part of your internal functions.
3. Precoro
Precoro offers a vendor management and procurement product that’s designed to reduce manual procedures, automate purchases, approvals, and bring more visibility into the procurement process with custom approval workflows.
Precoro’s features include:
- Approve documents and requests on the go via email and Slack
- Simple analytics that break down your procurement behavior in one source of truth
- Integrations with NetSuite, Quickbooks, Xero, and a wide range of third-party applications you already use as part of your vendor management stack
- A user-friendly interface
- Increased security with SSO and rleibale 2-factor authentication
Precoro’s vendor management platform is designed for small and midsized businesses looking to eliminate manual work without hurting accuracy.
4. Procurify
Procurify is a modern vendor management platform that offers :
- One source of truth where businesses can track and approve purchasing decisions
- Custom approval workflows that include as many decision makers as required
- Real-time insights that shows expenses as they’re made in real-time
- Physical and virtual expense cards you can issue to everyone on your team, and
- Detailed insights on individual vendors and their product catalogs
Procurify also integrates with Netsuite, Slack, and QuickBooks, as well as with custom applications, using the Procurify API.
5. Kissflow Procurement Cloud
Kissflow Procurement Cloud is a flexible procurement and vendor relationship management platform designed to help big organizations run agile vendor management operations, with a product that helps you:
- Create purchase requests using simple, easy-to-use forms
- Generate purchase orders using approved purchase requests
- Onboard, manage, and offboard vendors in a simple platform
- Approve and pay out invoices with three-way matching (with your purchase requests and purchase orders)
- Pull up detailed analytics that show everything about individual transactions on a daily, weekly, and monthly basis
- Integrate with the rest of your software stack
Kissflow makes it easier to manage vendors and the entire procurement process whether you’re processing one or 100 items per day.
6. PRM360
PRM360 offers procure-to-pay solutions to businesses in the Asia-Pacific region. The vendor management system is designed to help businesses:
- Analyze expenses with AI to identify opportunities to save money
- Customize their vendor management workflows to fit their use cases
- Involve as many stakeholders as possible in the vendor management process
- View and manage product catalogs from easily
PRM360 is more of an enterprise vendor management software designed around the needs of larger enterprises like hospitals, pharmceutical firms, and construction companies.
7. Tipalti
Tipalti is a accounts payables and vendor management solution designed to help finance teams scale and automate operations.
- Collect supplier contact, banking, and tax details to streamline the AP process
- Automate accounts payables with custom workflows
- Create stronger approval chains that will eliminate fraud
- Pay global suppliers in minutes with multiple channels
- Manage finances through compliant channels
- Detect fraud with deep audit trails and notes
Tipaliti focuses on accounts payables, managing payment orders, and automating the entire vendor payments process end-to-end.
Choosing the right vendor management system will help you speed up your procurement process, track all your purchases from one source of truth, eliminate fraud with better auditing, and create custom workflows for reviewing transactions.
No matter how powerful your new vendor management system is, you will still run into issues if your finance team and third-party suppliers or vendors can’t start using it quickly enough. You’ll notice that purchase requests will pile up and fraudulent payments will go unnoticed, all while your procurement process backs up.
With Whatfix, organizations are empowered to create in-app guided onboarding and application training to drive adoption of new vendor management, procurement, S2P applications – all in a non-technical, no-code environment.
With Whatfix, your team has the tools to create the following in-app content that lays directly on your vendor management application:
- Step-by-step flows
- Onboarding task lists
- Smart tips
- Pop up messages and videos
- Compliance alerts
- Searchable knowledge bases that provide process documentation and links to additional support content
With this in-app content, organizations are able to find technology ROI with their new vendor management system by driving end-user adoption by learning in the moment of need and in-app guided support.
IT teams are also empowered to understand how these technologies are being adoption by capturing behavioural analytics on how these tools are being used – helping to identify what features are (and aren’t) being adoption, and what processes need additional training and support content.
Whatfix speeds up onboarding and drives adoption of new vendor management system – empowering your employees and vendors to become expert application users – by coaching vendor management sofware end-users at the moment of need. See Whatfix in action for yourself now!
Request a demo to see how Whatfix empowers organizations to improve end-user adoption and provide on-demand customer support
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