01 May Reaching Out – How Companies Engage New Vendors
If this were Jeopardy, the category would be “Initial New Vendor Engagement,” and the $100 category clue would be “53 percent of organizations send new vendors this.”
Are you ready to buzz in on that one?
Correct response: “What is a W-9 form?”
Good! You’re on the board. For the $200, answer: “Just 22 percent of organizations mail this.” Correct response: “What is a Welcome Letter?”
But let’s use the James Holzhouer approach and choose Initial New Vendor Engagement for $1000, Alex. Answer: “Seven percent of organizations do this in regards to initial new vendor engagement.” Correct response: What is “Send Nothing!”
The flip side of that is that 93 percent of organizations reach out to new vendors in some way, whether with a welcome letter or a vendor information form, or simply sending them a W-9 or W-8 form to complete.
The complete picture of how organizations reach out emerges in VendorInfo’s 2019 Vendor Onboarding Management & Compliance Survey and in this chart:
Twenty-nine percent send vendors information on “How to work with us.” Along with the 53 percent that send W-9 or W-8 forms, the same majority percentage say they send a “new vendor form,” which may incorporate a substitute W-9 together with other information they need to gather from the vendor in order to pay them — such as contact information, payment instructions and bank account information for electronic payment. In the “Other” category, bank information for ACH payment was particularly specified.
Of course, such exchange is often done via a paper process. In most organizations, vendor onboarding is still largely a manual process. However, slightly more than a third have an automated approval workflow and approximately one quarter of organizations employ a vendor self-service application to onboard vendors, saving time and money.
For more results, see the full 2019 Vendor Onboarding Management & Compliance Survey.