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AGENDASherry DePew. Your Vendor Master File - A Strategic Resource Key Goals Vendor File Issues A Vendor Management Program Best Practices Questions and Answers. Your Vendor Master File - A Strategic Resource. Vendor file is a key corporate resource Ownership belongs in AP (87%) - PowerPoint PPT PresentationTRANSCRIPT
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AGENDA Sherry DePew Your Vendor Master File - A Strategic
Resource Key Goals Vendor File Issues A Vendor Management Program Best Practices Questions and Answers
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Your Vendor Master File - A Strategic Resource Vendor file is a key corporate resource Ownership belongs in AP (87%) Many disbursements are made to payees that
typically do not have involvement with purchasing
tax payments, garnishments, employee reimbursements, donations and customer refunds are some examples
Limit who can add or update vendors People who can add or update vendors must
not be allowed to process transactions such as invoices and purchase orders
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Your Vendor Master File - A Strategic Resource (cont’d) Federal, state, international laws and
regulations make it important to keep your vendor file accurate
Eliminating duplicate payments, strategic price negotiations and accurate financial reporting are impossible without a clean vendor master file
Jon Casher (IOMA vendor file management expert) says that any vendor file with over 1000 suppliers will require the aid of an outside expert to effectively manage
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Key Goals - Vendor Master File Make accurate and timely vendor payments Reduce duplicate payments Comply with laws and regulations Catch / reduce fraud Know where you spend money Know your vendors Save money Company wide tracking requirements
Diversity Business Continuity Treasury Procurement (Contracts)
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Know Your VendorsHow are these related? Marriott JW Hotels Renaissance Courtyard Residence Inn Fairfield Inn TownePlace Suites SpringHill Suites Ritz-Carlton ExecuStay Executive Apartments
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Comply with Laws & RegulationsSome Laws and Regulations Independent Contractor and 1099-MISC Non-Resident Alien and 1042S Gramm Leach Bliley Privacy Act Health Insurance Portability and
Accountability Act (HIPAA) Office of Foreign Assets Control (OFAC) Foreign Terrorist Organizations (FTO) Bureau of Industry and Security Lists Patriot Act Sarbanes Oxley Other - Industry, Country, State specific
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Cause and Effect Third party recovery efforts show the majority
of duplicate payments today are caused by vendor set up problems and related suppliers
Records show that 7% of the vendor population changed their name or corporate structure each year prior to July 2008
Experts predict that by the end of 2009 the rate will increase to 11 to 15%.
If duplicate vendors are identified and merged in the vendor database over 75% of duplicate payments can be eliminated
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Return on Investment Purchase Smarter
Know your full spend with the supplier and it’s family to negotiate better pricing
Process Smarter Reduce the vendors in your pull down list to
eliminate confusion and errors at the requisition, purchase order, and voucher level
Pay Smarter Get the payment to right place the first time
and eliminate stale dating, phone calls, past due invoices and statement research.
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Vendor File IssuesSome Vendor File Problems Missing or Invalid Tax Ids. Missing or Incorrect 1099 Categories Names Inconsistent with Tax Ids. Vendors tied to inventory items with very low
turn rates. 35% - 65% of “active” vendors are one-time
vendors Resource requirements result in a reactive
approach to updates Electronic payments/purchase orders
eliminate the dependency on good vendor data
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A Vendor Management ProgramAssess Survey Current Situation
Identify and collect ALL relevant documentation
Identify ALL vendor files and data sources including those used for e-procurement, e-payment and p-cards
Review and verify your actual Vendor Setup and Maintenance Processes and Controls against documentation
Centralize the collection, storage and updating of all vendor related requirements in an environment accessible to invested users
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A Vendor Management Program Cleanup (cont’d) Other Vendors You May Want to Look At
Federal Government Departments and Agencies
States Local Governments Postal Service Garnishments Petty Cash Foreign One Time
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A Vendor Management ProgramCleanup (cont’d) Review Possible Duplicates and Decide
Impact of rules on other files/tables Which to keep Which to drop Which to merge
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A Vendor Management ProgramRe-Assess Verify New Adds and Changes against
Guidelines and Standards Review and revise procedures, guidelines
and documentation, as required Train and/or Re-train, as required Utilize the next generation tools to prevent
duplicates Remember to be successful this will have to
be a process, not a project How do companies manage this without
adding people?
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A Vendor Management Program Enhance IRS TIN - Name Consistency
Verify Name and TIN against IRS data OFAC and FTO Checks
Check vendors against OFAC / FTO list and other lists
Utilize 3rd Party Databases Add D&B Numbers Add SIC or NAICS codes Add Credit Information Obtain W-9 or Substitute Obtain Minority Owned Business, Women
Owned Business status, etc.
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Vendor Master FileEnhance (Continued) Verify vendors against internal database and
check to published lists Restrict adding and updating Review all adds and changes Secure a W-9 or substitute Purge and cleanup every year Use standard rules for names Use USPS and UPU rules for addresses Capture phone & fax number Involve purchasing for any new vendor who
will be issued a purchase order
Vendor Master FileEnhance (Continued) Lexus Nexus Bank Account Validation Diversity Business Continuity Scheduled & Ad Hoc Blanket Updates Vendor Self Service
AuditSolutions 2008 Slide 16
Copyright © IOMA 2004 - 2008 Slide 17
Copyright © IOMA 2004 - 2008 Slide 18