Efficient management of preferred vendors is essential to an organization’s long-term success.
Yet many businesses have convoluted vendor-management strategies that act as hindrances instead of assets. Improving preferred vendor-management practices can save organizations on contingent worker costs while maintaining access to quality talent.
With that in mind, the information below can help improve any oversight of subvendor resources. You can implement the strategies to cut costs, improve compliance protocols and insulate your organization from civil liability.
How to improve time-approval processes for subvendor resources
The time-approval process can be challenging because your organization likely receives invoices from various subvendors. This can create a backlog for your HR and payroll departments.
Further complicating matters is the reality that your key vendors may not receive payment by their projected deadlines. Delayed payment disbursement can strain relationships with vendors and even result in the loss of valuable contracts.
To improve your organization’s time-approval process, your firm should deploy advanced reporting tools. You could also contract a fully integrated payroll-services and vendor-management provider.
These organizations conduct all time-approval processes and send you a consolidated invoice monthly. Your HR department will then be responsible for reviewing and approving a single document, as opposed to multiple payment requests.
How to better manage Invoices from subvendors
For optimal efficiency, you may want to consider partnering with a subvendor management services provider. These payroll firms process all of your invoices and send them to your HR department.
Instead of receiving separate invoices from multiple vendors, all of your billing documents will originate from one supplier. These invoices will be broken down by business unit and other criteria to help your team stay organized.
You will have a clear picture of how much you’re being billed, what you’re being charged for, and where these invoices originated. You will then be responsible for paying a single invoice while the biller will disperse the funds.
How to generate accurate reporting around non-approved vendors and resources
Partnering with a vendor-management and payroll firm is a pragmatic solution to many challenges that arise when working with multiple preferred vendors.
While you can invest in various digital applications, implementing these new tools can be extremely costly. It can also increase your time-approval and invoice-management processes, as learning how to effectively use a new reporting system often involves a steep learning curve.
Outsourcing your reporting needs to a third party is fast, cost-effective and straightforward. An expert team will have the extensive experience with cutting-edge reporting tools. This allows them to provide your organization with the raw data and context to interpret information accurately.
In turn, your organization can gain valuable insights about your payroll processes and the knowledge to make data-driven decisions regarding your subvendor management.
How to consolidate all subvendors into a single MSA
While invoicing and time-approval concerns present some major headaches for your organization, auditing and monitoring Master Services Agreements (MSAs) is even more challenging. With this in mind, it’s critical to consolidate all of your subvendors into just a few MSAs.
Ideally, you want to govern all of your vendor relationships under a single MSA. However, there are rare instances in which you might need a secondary MSA to address interactions with a niche vendor.
When you contract with a payroller for your subvendor management, they will consolidate your MSAs for you. You will need only to forge a single new MSA with the payroller. They will then create and maintain MSAs with your various subvendors so you can more easily manage your accounts.
Benefits of subvendor management practices
Leveraging a subvendor management provider offers several notable benefits to your organization, including:
Decreased Risk of compliance Issues
Regulatory compliance is a priority across all industries. Failing to adhere to tax codes, employment laws and other regulations can result in hefty fines and other penalties that could disrupt your business.
A subvendor management provider will help you avoid these issues by ensuring all practices are designed in accordance with the latest regulations. They will manage your MSAs and combine them into a single service agreement.
A subvendor management provider can also help you increase profitability.
They accomplish this by identifying cost-saving opportunities within your existing vendor partnerships. They will also institute rate-control practices to provide you with the ideal mix of affordability and access to talent so you can execute core tasks with ease.
Increased Audit Capabilities
A comprehensive suite of reporting tools can increase the audit capabilities of your organization. With the right technology, you will be able to review existing vendor relationships and access essential data quickly. Auditing is a crucial component of vendor management that you cannot afford to neglect.
RFP Checklist for pre-identified contractor payroll vendor selection
Are you getting the most out of your contractor payroll program? Every organization’s needs are different, but there are several crucial elements to keep in mind when evaluating a contractor payroll program. These include:
- Infrastructure and expertise
- Worker management
- Rate management
However, there are other, less obvious criteria that still make a big difference in cost, compliance and satisfaction.
If you’re evaluating a new contractor payroll provider or would like a tool for assessing whether you’re getting the most out of your current program, download your detailed RFP Checklist for pre-identified payroll vendor selection below: