April 22nd, 2015

Garbage in, Garbage out: The Importance of a Clean VMF

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When it comes to eating healthy, one adage stands above all else: “You are what you eat.” As a kid, it manfests as health class trying to preach the virtues of salads right before the lunch room serves you fried chicken and mashed potatoes. As adults, the never ending battle between our taste buds and the bathroom scale has left many with a bad taste in their mouth. And while a good portion of us have certainly been a little weak willed from time to time, this dietary saying holds wisdom for many other parts of our lives than just our waistline.

To say Accounts Payable is detail oriented would be an understatement, to say the least. Now, more than ever, a properly functioning AP department can mean the difference between hitting your numbers or landing in the red. As the group that controls all money leaving the company, there is a lot at stake in terms of minimizing error. When mistakes mean lost profits, why run your AP like a broken diet?

In theory, it’s a no brainer that good inputs result in good outputs. In practice, however, we all know that it’s much easier said than done. Just as fast food give us empty calories and is nutrient deficient, so can bad supplier data slow us down with incorrect contact or payment info, forcing us to wade through extra work just to get through to the work that matters. All of your supplier information is held in the Vendor Master File, and errors here directly manifest as errors and delays in outreach, payments, and procurement. This results in extra work fixing and reconciling errors that should not have happened in the first place.

Just like trying to burn off that last doughnut you ate before swimsuit season, you wouldn’t have to be doing any work if all of that extra clutter wasn’t entering the system in the first place. This brings us full circle. Clean and correct data allows for efficient AP processes, creating a healthier overall business function.

To help companies understand the value of keeping a clean vendor master file, Lavante is holding a Thought Leadership Webinar Series to help people detox and tap into the full potential of this all important business resource.

Please register here:

http://resources.lavante.com/VMF-Detox-Registration.html

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April 14th, 2015

Great Blog Post on AP Now & Tomorrow

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You can count on Mary Schaeffer to make complex things simple and to make simple things profound.

She posted a great article on her blog this week related to Credit Memos and why so many credit memos go unrealized.  This is a nice discussion adding a little more oomph into her one-woman crusade for making the AP department a profit center – and for raising the overall esteem of the AP department across the larger corporate structure.  The great thing about Mary’s comments in this blog are how, in a world of ever-growing complexity, this topic focuses on the power simple communication.  In her statement of the problem she offer three reasons why a credit memo may not be realized:

  1. The credits are sent to purchasing, where they are either tossed in the garbage or filed as the purchasing professional doesn’t know what to do with them.
  2. They are sent to accounts payable (either by the vendor or purchasing) and the associate doesn’t know what to do with them. In the worst case scenario of this situation, the processor pays the credit memos.
  3. They are sent to the company addressed to no one and end up in a variety of places, rarely accounts payable.

In all of these scenarios the main breakdown is communication and a lack of good information.  If only AP departments could communicate better with their suppliers…  If only supplier could communicate and identify their AP contacts at customers more accurately…  You wouldn’t have this problem, you wouldn’t suffer these breakdowns.  You wouldn’t lose this money! Mary’s article goes on to say a lot more.  It is an easy read and certainly worth a look.  The content also recalls a fantastic white paper she wrote in connection with Lavante:  The Case of the Disappearing Credits.  Another great informative piece.  Also worth a read.

What is so important about Mary’s commentary in both her blog post and her white paper are the cross-section between supplier information, communication and profit.  Lavante has identified over the last fifteen years that the single most common reason for credits appearing in vendor records is a breakdown in communication between the customer and the supplier and that usually stems from having poor quality supplier information on file.

Please visit the links for more information about how Lavante tackles the problem of poor supplier information or credit memo recovery.

 

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April 3rd, 2015

Profit Recovery & Easter?

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What do Profit Recovery Firms and The Easter Bunny have in common? When I was young on Easter morning my parents used to hide plastic eggs around the house with little surprises in them. Some eggs had candy. Some eggs contained dental floss in them (I didn’t care for those eggs so much) and some Read More…

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March 24th, 2015

Lavante Announces Expansive Thought Leadership Series Through 2015

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San Jose, CA – March 24, 2015 – Lavante Inc., the leading provider of Cloud-based supplier management and profit recovery solutions for Fortune 1000, announced today its plans to deliver an expansive thought leadership series through the end of 2015.  Lavante will be partnering with several industry experts to publish a sequence of informational white papers, Read More…

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March 3rd, 2015

Your company is at risk for severe fines and penalties

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The Office of Foreign Assets Control administers and enforces economic sanction programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. These sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals. The U.S. government has become increasingly Read More…

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December 6th, 2014

Seven Tips to Avoid the Impact of Bad Supplier Data

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Bad data can be at the root of many finance and accounts payable challenges. And there are many ways vendor data can be processed that cause duplicate vendor files to be set up. Consider the various ways that a company names can be constructed.  The screen shot below how the Lavante Contact solution has located Read More…

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September 2nd, 2014

Building a Case for Vendor File Mangement

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Over the years of doing webinars about Vendor File Management, I have been shocked by how much feedback these presentations have generated.  One of the most intriguing topics from these webinars was how to build a case for a vendor file management program.  Although it may require time on your part, the most effective way Read More…

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August 24th, 2014

Days Credits Outstanding – a new metric for managing cash flow

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Days Sales Outstanding (DSO) and Days Payables Outstanding (DPO) are important, widely used metrics to manage working capital.  Financial managers monitor these statistics very closely and regard them as key performance indicators as they work to maximize overall cash flow as well as transactional efficiency.   Through our audit work communicating with extremely large numbers of Read More…

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July 4th, 2014

Inaccurate Vendor Data Impacts Multiple Departments and Can Jeopardize Critical Corporate Initiatives

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Without current, accurate vendor data, a long list of corporate initiatives can be rendered unmanageable or even impossible to execute. From procure-to-pay, supplier diversity and tax compliance to strategic sourcing and social responsibility, supplier data touches multiple processes and can have a dramatic impact on priorities throughout an organization. In my professional career, first as Read More…

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June 3rd, 2014

Vendor Statement Audit – A Best Practice for AP Departments (Part 2 of 2)

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In part one of this blog we discussed how the traditional approach to vendor statement auditing recovers only up to $100,000 per every $1B audited annual whereas a proper statement audit should recover 5-10X that amount.  In this blog I would like to discuss how and why Lavante is able to hit those much higher numbers. Lavante Read More…

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