Need Help with ROI for a Vendor Portal?

Need Help with ROI for a Vendor Portal?

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Calculating a rock-solid Return on Investment (ROI) for an Accounts Payable (AP) Vendor Self-Registration Portal project can be daunting.  First you need to calculate the total costs (investment).  The total costs need to include implementation costs, plus annual subscription/licensing, maintenance and support costs.  Your potential supplier can assist with identifying these costs. 

Next, you need to calculate your total savings (benefit) that will be unique to your company.  To make sure you capture all costs, talk to all stakeholders in the Procure-to-Pay process and identify their time to include in the savings costs.  These stakeholders can include Accounts Payable, Procurement, IT and large groups that submit vendor requests.

Here is an example of items used to calculate savings for a Vendor Supplier portal to automate the vendor setup process: 

Monetary Savings

  • Vendor Maintenance Labor Costs $

    • Hours per day x 260 days per year x Avg Rate per hour of staff

      • Change Existing Vendors

      • Add New Vendors

    • Vendor Data Validation (since it must be done vendor by vendor)

      • IRS, OFAC and Banking Detail validations. 

    • Reduce saved hours by 10% to account for manual processing

      • Portal downtime (should be minimal)

      • Rare, but potential scenario when a vendor is allowed to opt out of the portal (GDPR, etc.).

  • Vendor Data Validation Costs $

    • IRS TIN Match - Yes verifying with the IRS is free, however, registration needs lead time and your team’s personal tax data.  To reduce potential periods with no access, some use paid 3rd Party sites to validate against IRS records and those costs need to be included.

    • OFAC/SDN & Other Watch Lists – License and/or monthly fees for access.

  • Internal Requestor Labor Costs $

    • Estimated # of Requests submitted per year x # of minutes to submit requests - includes time communicating with the vendor.

    • Estimated # of Requests reworked per year x # of minutes to resolve with the vendor, correct and resubmit.

Non-Monetary Benefits

  • Compliance and Controls > Fraud Deterrence

    • Eliminates the need to gather W9’s and Banking data by allowing the vendor to self-register.

    • Removes confidential vendor information from Internal Requestors previously needed to submit on the vendor’s behalf.

    • Systematic Vendor Authentication.

    • Bank Routing/ABA & Bank Account Ownership validation.

    • Support IRS Regulatory Changes:  Interactive W-9 forms, reducing risk for penalties/interest for by collecting error-free, certified and signed forms.

    • Provides Diversity Certification and Industry Codes across vendor master file.

    • Collects and stores Insurance Certificates either by requesting from the vendor or attaching once received from the vendors’ insurance company.

  •  Increased Usability

    • Supports multiple languages.

    • Streamlines vendor setup and maintenance into a single usable tool.

    • Enhances the AP user experience by allowing the vendor to make their updates to addresses and banking.

    • Enables mass communication to vendors.

    • Potential to integrate with other 3rd Party solutions to gain efficiencies, such as with 1099 distribution.

  • Capital/Project Budget

    • Eliminate planned ERP enhancement projects.

Now with your total costs and total savings, input into your ROI template, review, revise (do it again) and present to leadership.  You’re a step closer to your vendor self-registration portal. 

For training and information on what you and your team can do to protect your vendor master file from fraud visit my website at www.debrarrichardson.com/training

For assistance with cleaning your vendor master file or reviewing your vendor setup & maintenance process visit my website at www.debrarrichardson.com/services.

#Stayhappy #puttingtheapinhappy #vendorsetupandmaintenance #vendorsetup #businesscase #apautomation

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