Vendor management is a term that describes the processes organizations use to manage their suppliers, who are also known as vendors. Vendor management includes activities such as selecting vendors, negotiating contracts, controlling costs, reducing vendor-related risks and ensuring service delivery. Vendors also need to be managed effectively in order to reduce the risk of supply chain disruption and ensure the goods and services provided are delivered on time and to the expected standard. Beyond this, an effective vendor management process can help companies build stronger relationships with their vendors which may, in turn, lead to opportunities to negotiate better rates. Learn also to document supporting files like quotations, purchase orders, invoice etc. that serve as source documents for transactions.