Successful companies must efficiently source and work with suppliers. Unfortunately, the process of onboarding suppliers is a costly, time-consuming process.

Companies spend numerous hours gathering required information from suppliers. Errors and inconsistencies in supplier data are a source of major inefficiencies and disruption. Indeed, incorrect supplier data is such a problem that buyers often impose penalties on suppliers for submitting incorrect data.

Onboarding is Costly

One industry estimate concluded that it can easily take nearly 400 hours to onboard a supplier, with a minimum of about forty five hours to capture supplier data and conduct verification checks. It takes an average of 13 emails or phone calls to a supplier to put in place the onboarding process, according to another industry calculation.

The estimated hours to onboard could result in a cost of over $35,000 per supplier, amounting to $17.5 million annually for a company that onboards 500 suppliers.

Inputting incorrect supplier data causes major inefficiencies as well. A 2014 study found massive inefficiencies from basic data errors:

  • a global oil & gas company was wasting $2 million annually because different internal groups were using separate upstream and downstream contracts for the same supplier due to the supplier having a different name within the oil & gas company’s records
  • a global retailer was similarly wasting millions because buying groups in different regions were negotiating on different terms with the same supplier and failing to combine processes due to the supplier’s inconsistent naming among the groups giving it the appearance of being two distinct companies
  • a global company with 900,000 suppliers was losing $2 million for every $100 million in orders as a result of inconsistent supplier IDs entered into POs for each relevant contract

Why Onboarding is Such a Problem

Onboarding and properly managing suppliers is costly due to poor data governance. In particular:

  • Supplier information being spread across multiple internal ERP, accounts payable, and other systems.
  • Data about suppliers constantly changes due to suppliers moving locations, overturn in personnel, and changes in ownership.
  • Inconsistent data about supplier identity and other fundamental information.
  • The inability of data updates to automatically sync across systems.

Validating Supplier Data: During Onboarding and On an Ongoing Basis

The Verify solution from Clause can reduce costs and inefficiencies in supplier onboarding and ongoing management. Clause is a platform that validates the data in legal agreements and documents in related workflows in real time.

Clause Verify reduces errors in supplier data by checking data that is entered by a supplier into an onboarding document against systems of record. Clause helps to prevent inaccurate or inconsistent data from being entered into a company’s systems in the first place. Clause can prevent a supply agreement from being signed or onboarding document from being approved if data is not first validated.

To address the problems that arise from continually changing supplier data and needing to keep it updated, Clause Verify can confirm whether supplier data continues to remain accurate throughout the course of the supplier’s relationship, such as monthly, annually, or in response to an external trigger. This functionality is important, as according to the U.S. Census Bureau, every hour 240 companies move and change address, 150 companies change phone numbers, and 5,769 people change jobs.

Supplier data that Clause Verify can validate before and after an agreement is signed includes:

  • company legal name and address
  • incorporation date and employee headcount
  • tax ID numbers
  • bank account numbers
  • payment remit address
  • data about licenses, permits, and credentials
  • valid email and other contact information
  • whether invoice details match agreed-upon pricing and payment terms
  • compliance of the supplier’s manufacturing process with standards and requirements
  • compliance with certain labor, environmental, trade, and other laws and standards

DocuSign Integration

DocuSign users can easily add Clause’s supplier data validation functionality to their existing procurement workflows, such as using DocuSign for onboarding acknowledgements and approvals and signing a supplier agreement. As shown in the screenshot below of DocuSign being used to complete a Vendor Application Form, by using Clause Verify, a DocuSign workflow can be created to only permit the approval or signature of onboarding documents if data about the supplier is accurate.

After the documents are finalized, Clause can continue to periodically check the supplier’s data without requiring manual effort and to prevent inefficiencies.

To learn more about implementing Clause Verify in your organization, contact