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Vendor Master files contain a considerable amount of information about a company’s suppliers. Over time, as new vendor records are added to the file and existing information is changed, errors will occur. These errors are magnified when acquisitions, mergers, or ERP system conversions or updates occur.
Inaccurate Information Contained In A Vendor Master File Poses A Significant Financial Risk To Your Organization
Cleansing of the Vendor Master file will reduce these risks including: overpayments, duplicate payments, prevention of some types of fraud, reduce the potential for missed discounts and allowances, and eliminate potential regulatory non-compliance. Vendor Master cleansing and maintenance will also increase productivity in purchasing and accounts payable as well as providing more transparency into vendor activity – leading to better analytics.
Common Errors In Vendor Master File
Some common errors in a vendor master file include:
- Missing, invalid, and/or incomplete information such as addresses or TINs (Tax Identification Number)
- Inaccurate USPS addresses, street names, abbreviations
- Multiple records for the same vendor
- Inactive vendors
Vendor Master Cleanse Services
Vendor Master Cleanse projects can include some, or all, of the following services:
Identification of Duplicate Records
TIN (Tax Identification Number)
TIN (Tax Identification Number) Matching with the IRS
The Tax Identification Number (TIN) is also known as an Employer Identification number (EIN).
An Employer Identification Number (EIN) is also known as a federal tax identification number and is used to identify a business entity.
Acquisition of a valid TIN from vendors is required, or backup withholding should be applied. Missing or incorrect TIN’s place the organization at risk for B-notices and penalties.
OFAC (Office of Foreign Control) Check
The Office of Foreign Assets Control is a part of the United States Treasury, and the group oversees determining whether a company or individual is authorized to do business in the United States. This check includes economic and trade sanctions based on US foreign policy.
Use of USPS systems for checking the accuracy of addresses and recognition of proper street names, abbreviations and zip codes including the four-digit codes for specific delivery route within that overall delivery area via CASS.
If an address has been changed with the USPS, updated addresses are available through NCOA.
CASS – (Coding Accuracy Support System) is the certification system created by USPS for validating addresses.
NCOA – (National Change of Address) is a secure dataset of approximately 160 million permanent change-of-address (COA) records consisting of names and addresses of individuals, families, and businesses who have filed a change-of-address with the USPS.
Project deliverables are customized to meet client specifications. All projects will include our “Best Practices for Vendor Master Maintenance” guide.