Vendor Management

The Complete Guide to Automating your Vendor Management Processes


There are lots of moving parts involved in managing vendor relationships. The vendor vetting process, onboarding, purchase requisitions, purchase orders, order confirmation, performance monitoring, etc.

All these processes are made up of several constituent tasks. And all these are tasks that must be carried out to ensure that your vendor relationships are working smoothly, which will, in turn, affect your day-to-day business operations.

Pro-tip: Learn how digital procurement can help you mitigate supplier risk. 

But, judging by the scope of tasks contained under vendor management, it can get overwhelming managing them all manually. That’s where vendor management process automation comes.

By automating vendor management processes and workflows in your vendor management system, you can get more done faster, with fewer resources, and with greater accuracy. Here’s a step-by-step guide to vendor management process automation and why it matters to your business.

Vendor Management Process Automation

Like we mentioned above, there are several processes and workflows in the vendor management equation that can be automated. Automated workflows and processes will help you manage your vendor ops faster, more accurately, and with less error.

Here are some key vendor management process operations you can automate.

Vendor selection process

Companies don’t just select vendors off the bat. There’s typically a lengthy process involved by which the procuring company assesses potential vendors to determine if they’re a good fit for their needs before choosing a vendor to move ahead with.

The vendor selection process involves engaging with potential vendors and seeking for further information on how well they understand the procurer’s needs, how much their product/service scope covers, and how much their solution would cost.

By automating the vendor selection process, procuring organizations can reduce the amount of time it takes to get started working with suppliers, and overall, make their vendor management more efficient.

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Vendor onboarding process

The vendor onboarding process is the total of the steps taken to get new vendors set up to collaborate with a procurer off their internal systems and processes. Vendor onboarding is key to vendor relationship management since how well it’s done determines how well the procurer and vendors can collaborate and communicate.

Invoice approvals

The invoice approval process involves several tasks required to authenticate invoices before approving them for payment. An automated vendor management system can be programmed to review invoices, purchase requests, and receipt orders before invoices are settled.

Vendor information management

Managing vendor relationships requires having key information about your vendors on file so it’s easier to reach them or make strategic decisions when necessary. An automated vendor management system can be programmed to collect these information from your vendors so you won’t have to manually edit every time.

Vendor performance rating

Vendor performance ratings track how well your vendors are fulfilling their part of any contracts you have so you can make strategic decisions about your relationship with them. Relevant metrics can be recorded and then form the basis of an automated vendor management process that’ll help you make decisions without having to wrangle data manually.

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Benefits of automating vendor management processes

When you have an automated vendor management system where manual tasks are wired to execute faster and more accurately, what advantages can you expect to derive? Here are 5 major benefits of automating your vendor management processes.

Reduced supplier risk

In customer-vendor relationships, there’s always the risk that a vendor will repeatedly fall short of your agreed terms and drag you through the mud trying to make the relationship work.

With your vendor management processes fully automated, you can automatically store and review data on the performance ratings of your vendors which will help in making purchase decisions. As a result, you’ll easily avoid vendors who have consistently performed below standards without having to keep learning by experience. Automation also helps you mitigate unprecedented risks like the covid pandemic.

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It’s a truth we can all get behind: a lot of things in business boils down to speed. Who runs their supplies faster, produces goods faster, gets them to market faster, etc. From that perspective, it’s easy to realize that the speed factor is one of the most significant benefits of automation in vendor management.

Automating manual vendor management processes removes the human factor from the loop, or reduces time-wasteful human influence significantly, leading to processes that are completed faster.


Automated processes are designed to manage information that’s been fed into them based on a clearly defined standard. As a result, it’s hard to get anything wrong, simply because the system is following a pattern and can easily issue an alert once anything begins to get out of line.

Here’s another huge benefit of automated vendor management processes: a programmed vendor management system simply executes a command by referring to instructions it’s been given. Unlike humans, it doesn’t depend much on external factors that can cause errors and as a result, delivers more accurate outcomes.

Transparency and data visibility

An automated vendor management process can easily keep track of all the data it generates and as a result, it’s easy to track how the procurer’s relationship with a vendor is going, i.e. what’s working, what’s not, and what to do about it.

Unlike a manually operated system where procurement staff have to read between the lines and analyze hundreds of documents to compile data, an automated vendor management process can be programmed from the start to track a specific data point and offer periodic reports that can be collected and analyzed with ease.

Supply forecasting

Automated vendor management processes provide lots of data that can easily be channeled to determine supply trends a business can take advantage of to ensure stable operations. By keeping an eye on the supply records or particular vendors, businesses can plan to stock up on essential inputs that are critical to their operations to ensure smooth sailing even during hard times.

Faster payments

Another huge advantage automated vendor management processes offer is visible in invoice settlement timeframes.
With a huge bulk of the work needed to run the customer-vendor relationship fully automated, accounts payable gets resolved faster, suppliers get paid quicker, which in turn keeps your organization creditworthy in your suppliers’ books.

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Things to consider while executing digital transformation

Now you know the benefits you can derive by automating your vendor management processes, but there are still some need-to-knows to keep in mind to ensure your digital transformation goes according to plan and is overall positive for your business. These include:

  • Keep an eye on your KPIs to help you track how exactly your digital transformation is reshaping your business outcomes.
  • Communicate with your customers. Is your digital transformation improving or hindering customer satisfaction?
  • Communicate with your vendors. Is your digital transformation helping them fulfill their obligations better?
  • Keep an eye on the competition. What are our competitors doing? Are we moving ahead or slacking backward in the race to reach more customers?

Digital transformation in your vendor management process isn’t a task you can execute one and off. It’s a progressive effort that has to be carried out with a retrospective outlook to help you measure exactly how much your digital transformation is changing your organization.

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How Kissflow can help with automating your vendor management process?

In summary, you need to automate your vendor management processes if you look forward to a future with lower costs, increased accuracy, and increased data transparency.

And how exactly do you navigate that? What steps do you take to implement automation across your vendor management system? What tool do you use to make digital transformation a reality across your vendor management system?

Use Kissflow.

Kissflow Procurement Cloud is an intelligent procurement management tool designed to help you get started with automating your vendor management process from the get-go. Kissflow features drag-and-drop process builders, intelligent automation, and in-depth reporting that supercharges your vendor management so you can do even more with less.

Take Kissflow for a spin here.

Automate Your Vendor Management Processes With Kissflow