Supplier onboarding essential checklist and best practices
When you start working with new suppliers, supplier onboarding is an essential first step. The alternative is a stressful, ad-hoc process that could result in a breakdown of relations, loss of productivity, and lost income. Proper onboarding allows you and your suppliers to enter a business relationship with clear expectations.
Supplier onboarding follows many of the same principles as client onboarding - structured workflows that ensure nothing falls through the cracks. Here is how we approach client and partner onboarding.
Client Onboarding Made Easy
Summary
- Ad-hoc supplier onboarding creates chaos - Without a structured process, you risk stressful relationships, lost productivity, and breakdowns that cost real money
- Risk evaluation comes first - Check financial health, track record, and capacity before committing, then create contingency plans for limited supplier markets
- Clear agreements prevent problems - Document expectations for volume, specs, lead times, pricing, delivery, and returns so both your staff and suppliers know exactly how to work together
- Supplier training is often overlooked - Schedule on-site orientation sessions to cover everything from order placement methods to product presentation, barcode requirements, and restocking processes. See how Tallyfy streamlines supplier workflows
When you start working with new suppliers, supplier onboarding is an essential first step. The alternative is a stressful, ad-hoc process that could result in a breakdown of relations, loss of productivity, and lost income.
With onboarding topics appearing in over 1,100 combined conversations we track with mid-market teams (client onboarding alone accounts for 860), having a structured approach eliminates this possibility and allows you and your suppliers to enter a business relationship with eyes wide open. In discussions we have had about procurement workflows, one logistics company shared their challenge of coordinating between clearing agents, document controllers, and transporters - with processes spanning everything from declaration submission to delivery and payment. The complexity of multi-party handoffs makes structured onboarding essential. Both companies know how to do business with each other, who to talk to, and what processes to follow. It’s a lot like employee onboarding - after all, even though you don’t directly employ suppliers, they still do work for you.
Your business will have unique characteristics, so you may want to add a few things to the list, but our essential onboarding checklist is a great way to get started!
Copy and paste this checklist onto your letterhead
We will go through each point in greater detail shortly. But to get you started, here is the basic list:
Evaluate supplier risks
- Check business product and service track-record
- Check creditworthiness (financial health)
- Formulate contingency plans
Discuss and agree:
- Expected nature, volume, and frequency of requirements
- Product or service specifications
- Lead times
- Any extras required (g. barcodes, labels)
- Order placement requirements and format
- Pricing and discounts
- Payment terms
- Delivery process / logistics
- Returns and accounts credits process
- Supplier training requirements or orientation sessions (if required)
Gather information:
- Registered name, address, and contact details
- Any licenses, insurance, or documentation you need
- Banking details
- Supplier contact people and their roles
Share all information internally:
- Accounts department
- Purchasing department
- Warehousing and inventory control
Share information with the supplier:
- Record all agreed terms and send for formal approval
- Provide invoicing details
- Give contact details for purchasing manager, accounts, and warehousing / logistics
- Provide training and orientation sessions as needed
Why evaluate supplier risk?
Your business depends on its suppliers - so it probably makes sense to see whether the supplier is dependable! You will want to know how long the company has been in business, what its industry reputation is like, and whether it has sufficient capacity to meet your needs.
You also need to examine the company’s financial health. A struggling company could unexpectedly close its doors leaving you in an awkward situation. When there is a limited number of suppliers to choose from, you might have to compromise a little, but at least you will know what the risk is and formulate a contingency plan.
Rules of engagement
This is the most important part of your checklist. What are your expectations?
Can the prospective supplier meet these needs? How will you work together and who will do what and when? What are your supplier’s obligations if things go wrong?
This matters even more if you’re trying to minimize waste by implementing a Kanban inventory management system. Ultimately, this information will go into a formal, written agreement that will govern your business relationship.
Generic templates are available, but it’s best to draft a customized agreement. You will also share this document with everyone in your company who is expected to deal with the supplier, allowing them to deal with any problematic situation that could potentially pop up. For example, when can an inventory manager or quality controller reject goods?
How should the accounts department handle invoices and payments? Who places orders and how should they be placed?
Who approves orders? Both your staff and your supplier must know these details if they are to work efficiently together.
Information gathering and sharing
Basics like contact people and how to get in touch with them are pretty obvious, but many businesses overlook the need to actively train suppliers. The training needs analysis should include everything from order placement methods to tech specs, product presentation, and delivery processes.
For example, most retailers expect stock with barcodes already allocated and on the label or package. They need to link these with pricing in-store databases. Some retailers prefer to stock their own shelves, but others expect suppliers to handle restocking and merchandising and will require frequent visits to ensure they don’t end up with empty shelves.
No matter how simple your purchasing and goods receiving processes are, it’s advisable to schedule a physical supplier onboarding and orientation training session on-site at your business premises.
Final tips for successful supplier onboarding
Having a great checklist isn’t going to help you if you don’t make someone responsible for making sure you have checked all the boxes. In our experience at Tallyfy helping organizations with procurement workflows, you need to allocate a specific person to oversee the supplier onboarding process. Ownership matters here.
Needless to say, this person must have excellent communication and organizing skills. When onboarding new suppliers, always look at ways to save time and money. For example, a supplier portal will show suppliers routine details they might otherwise have to inquire about in person.
The more you automate routine tasks and processes, the easier doing business will be - both for you and for your supplier. But software can be costly, so choose an adaptable package that can be used for more than one function.
Tallyfy’s workflow management software fits the bill, allowing you to strealine any business process (onboarding included), as well as acting as an information portal for the supplier. And lastly, remember: suppliers are more than just companies you buy stock or materials from. They are partners in a relationship that should be mutually beneficial.
They help your business to grow, and you help their business to grow. Keep this in mind throughout supplier onboarding, since this is the time to plot a route towards mutual success and a satisfying business relationship.
Ready-to-use supplier onboarding templates
Is supplier onboarding smooth?
Are you hearing this at work? That's busywork
Enter between 1 and 150,000
Enter between 0.5 and 40
Enter between $10 and $1,000
Based on $30/hr x 4 hrs/wk
Your loss and waste is:
every week
What you are losing
Cash burned on busywork
per week in wasted wages
What you could have gained
160 extra hours could create:
per week in real and compounding value
Total cumulative impact over time (real cost + missed opportunities)
You are bleeding cash, annoying every employee and killing dreams.
It's a no-brainer
About the Author
Amit is the CEO of Tallyfy. He is a workflow expert and specializes in process automation and the next generation of business process management in the post-flowchart age. He has decades of consulting experience in task and workflow automation, continuous improvement (all the flavors) and AI-driven workflows for small and large companies. Amit did a Computer Science degree at the University of Bath and moved from the UK to St. Louis, MO in 2014. He loves watching American robins and their nesting behaviors!
Follow Amit on his website, LinkedIn, Facebook, Reddit, X (Twitter) or YouTube.
Automate your workflows with Tallyfy
Stop chasing status updates. Track and automate your processes in one place.