Understand What Vendors Are and the Payment Process to Vendors

Almost every company, especially those at the middle to upper level, has collaborated with vendors. This is because they are companies or individuals who function to distribute and sell materials, especially raw materials. Therefore, vendors are an important part of a company's business.

However, what needs to be understood is that vendors not only provide raw materials but also supporting materials such as products or services. Later on, these products will be packaged in such a way that the company's profits can increase.

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To understand it more comprehensively and in detail, companies need to understand the ins and outs of vendors. Starting from understanding, functions, responsibilities, types, to payment methods. Find out more only on Brick.

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The Definition of Vendor

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As explained above, vendors are individuals or companies that sell products or services to other companies. One of its functions is to be able to increase company performance and profits. Later, they will prepare everything the company needs to support its activities.

However, vendors not only provide raw goods but also semi-finished goods and even finished goods. Apart from that, they also provide services that can accommodate company needs.

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For example: a company needs printer components for their work activities. Therefore, companies usually contact vendors who are able to provide the company's needs. After that, they will be the ones who will find and distribute the company's needs.

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3 Functions of Vendors

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The company's need for vendors is considered capable of both assisting and enhancing the company's performance. This is because the company will become more efficient and focused in managing its productivity to be more precise in production activities.

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Some functions that companies need to know from vendors are:

• Able to assist in the operational activities and production activities of the company.
• Providers of goods or services needed by other companies are able to meet the desired targets.
• Suppliers of all kinds of materials for the operational and production work of the company.
  

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Therefore, in order for production activities to run smoothly and maximally, the company needs to be careful in collaborating with vendors. This is necessary so that those involved in the collaboration can provide guarantees regarding the materials desired by the company.

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Vendor Duties and Responsibilities

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There are several tasks and responsibilities of vendors that need to be known by the company:

• Fulfilling the needs and requests of the company collaborating with the vendor.
• Ensuring that the quality of the products needed by the company is truly good.
• Providing a guarantee that product delivery is timely.
• Offering the best service to the company at competitive prices.
• Collaborating according to the agreed terms.

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Types of Vendors

In the vendor business, there are only two types: providers of goods and providers of services. Read the explanations below for more details.

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1. Service Provider Vendor

Vendors engaged in the service sector will collaborate with companies to ensure the smooth running of all company needs. For example, if a company needs a delivery service provider capable of reaching remote areas, those in this field will provide and assist the company until completion.

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2. Goods Provider Vendor

Vendors operating in the supply of goods sector will collaborate with companies to supply all company needs. Their function supports the company's production activities to run smoothly. For example, if a company needs nuts and bolts for the smooth running of production activities, those who provide and prepare nuts and bolts according to the company's needs will be involved.

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Ways to Obtaining Quality Vendors

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After understanding the definition, functions, as well as the tasks and responsibilities of vendors, companies need to know how to obtain good ones:

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1. Price Matching Service

The company's need to collaborate with vendors should consider the company's budget. However, if the company knows that their reputation is already good and the service is maximal, then price is not an issue.

Also Read: Sales Invoice: Definition, Components, and How to Make It

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2. Viewing Available Product Variations

For large companies, the need for products is very diverse, ranging from models, types of materials to sizes. Therefore, the company needs to see if the products available from the vendor meet the company's needs.

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3. Service Quality

One important thing for companies to know is how they serve the company's needs. Are they quick and responsive to all complaints? Do they offer promotional prices for certain items, and so on? Service quality greatly influences vendor selection.

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4. Check References

References are important because companies can track the vendor's track record. If it's good enough, it can be a useful relationship in the future. If not, it's better to choose another.

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Brick Assists in Vendor Payments

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In terms of making payments to vendors, Brick, as an Open Finance API, can help companies transact more easily. Brick accepts payments and sends money to over 140 banks instantly. Improve your corporate user experience with smoother cash management, bookkeeping, and invoice payments.