Gain Control of Your Vendor Master File
Unclean Vendor Master Files can have a critically negative impact on the entire Purchase-to-Pay data cycle. It affects not only Accounts Payable but also the Purchasing department, with the potential to bring unwanted tension to vendor-client relationships.
Top 5 Ramifications of Unclean Vendor Master Files
- Missed Discounts and Contract Incentives
- Inaccurate Spend Analysis and Reduced Negotiating Power
- 1099 Tax Reporting and Compliance Issues
- Fraud Opportunities
- Duplicate Payments
Cleansing Your Vendor Master File
Technology Insight provides customers with a comprehensive analysis of their Vendor Master File. By following our 5-Step cleanse program, this daunting task becomes quite manageable. A good benchmark for this process is to make sure that 65% of the vendors available in the active system are of active usage in the past 12 months. The 65% benchmark is an excellent indicator that underlying business processes are thoroughly optimized.
In order to complete the cleanse, one must:
- Deactivate Vendors Never Used
- Deactivate Vendors Not Used Within 48 (Or 36 Or 18) Months
- Deactivate Duplicate Vendors
- Analyze Remaining Vendors for Missing Data
- Match and Verify Taxpayer Identification Numbers
Doing this once is not enough – cleaning your Vendor Master File needs to happen on a regular basis, or you will find yourself right back where you started. Maintenance of your Vendor Master File should be completed monthly.