Vendor File Mgmt Posts

Maintaining Supplier Data and Information to Maximize ERP Systems and 1099 Reporting Compliance (Part 1)

Monday, July 12th, 2010

Supplier information is integral to optimizing your relationships with your suppliers and for maximizing the value from your ERP system and other automated solutions.  Used correctly, a well kept supplier master data file is a strategic asset that can be leveraged into time savings, resource savings and dollars to your company’s bottom line. 

The biggest challenge to maintaining the quality of your supplier data is its near immediate decay after being recorded.  Suppliers constantly undergo mergers, purges, acquisitions and employee churn that challenge the integrity of their data.  Dun & Bradstreet (D&B) reports its database of businesses experiences annual changes of 20% for addresses, 17% for business names, and 18% for phone numbers underscoring how quickly and frequently supplier data decays.  ERP systems perform some data quality measures at the time a supplier is set up, but they do little to preserve the integrity of the data over time.  ERP systems are reliant on quality data, but they do not ensure it.

Allowing your supplier data to decay over time is very costly to your enterprise. Inaccurate data delays implementation of ERP systems and other automated solutions and can prevent those solutions from achieving their optimal ROI, effectiveness or their value over time.  Failure to identify overlaps or relationships within your supplier population can lead to missed volume discounts or rebates as well as an increase of duplicate payments by up to 300%.  Poor supplier data quality is also very costly in terms of lost efficiency and time.  Bad addresses alone can lead to miss-sent shipments and checks.  Quality supplier data is also vital to stay in compliance with various external regulations and internal controls.  Failure to achieve this compliance can be both disruptive and very costly while causing great exposure and risk.

Collection and management of supplier data is more important now than ever.  New 1099 tax legislation included in the funding provisions of the Patient Protection & Affordable Care Act (March 2010) requires companies to collect valid Tax Identification Numbers (TINs) on a much larger scale than pre-legislation levels.  Today most companies are expected to perform 1099 reporting for less than 10% of their supplier population. When the new law takes effect, companies can expect reporting levels to rise above 90%.  Companies will need to implement new policies and potentially even new systems to manage supplier information more accurately in pursuit of staying in compliance.

The question arises: How are you going to ensure the ongoing quality of supplier information to achieve optimal project ROI and on-going efficiency while maintaining compliance with controls and regulations? 

Check back for part two.

Tags: , , , , , , , , , ,
Posted in 1099 Reporting, Patient Protection and Affordable Care Act, Supplier Information Management, Technology, Vendor File Mgmt | No Comments »

Unlocking trapped working capital from your supply chain (Notes from Spendmatters.com analysis of Basware and Lavante partnership announcement)

Thursday, June 24th, 2010

Lavante’s recent activities were covered this week by an industry expert.

Jason Busch of SpendMatters.com spent some time exploring the new Lavante/Basware partnership diving a little more deeply into why such a partnership would take shape.  Astutely, Busch points out that neither firm has played at “superficial Barney deals” (read: “I love you, you love me”) which frequently dot the partnership landscape.  So why should these two groups, which may seem to have otherwise disparate backgrounds come together?

From his review of the deal announcement, Busch quickly connect dots, and highlights a marquee quote from the release, “the combination of Basware’s enterprise purchase-to-pay solutions and Lavante’s suite of Supplier Information Management (SIM) tools will enable Fortune 1000 companies to drive efficiencies throughout the purchase-to-pay process and maximize their return on investment.”  If I may add a little more self-serving color around this quote… For years, Lavante has delivered vendor file management in tandem with its flagship supplier recovery services and has recently expanded vendor file processing into ongoing on-demand SIM.  Basware customers, attempting to install enterprise-wide P2P solutions are often gated by poor quality of their resident supplier data  and there really is no quick fix for this dilemma.  Although a supplier cleanse project can prove helpful to improve data quality in the short term, that information begins to deteriorate rapidly.  Lavante benchmarking demonstrates that at least 50% of suppliers will change some relevant attribute on an annual basis and the Institute of Management Accounting estimates that up to 7% of companies annually change their name.  Long story short:  Lots of constant change.  The solution to this constant data drift may start with a project, but truly requires an ongoing process to sustain the data quality, and that is where Lavante SIM comes into play and provides that ongoing quality (as well as many other services).

Another of Busch’s accurate observations (which was not mentioned as directly in the release) is how Basware can leverage Lavante’s recovery services to decrease the barriers of entry for clients that run into budget difficulties.  Busch writes, “Lavante can serve as a means to generate the working capital to fund investments in invoice automation solutions such as Basware.”  For years Lavante has refined its platform for communicating with and driving compliance throughout a company’s vast vendor population.  In that process, Lavante is able to perform a near-effortless review supplier AR ledgers.  It is with this ongoing visibility that Lavante is able to unlock working capital from within the supply chain and return it back to the enterprise.  These dollars which average about $600,000-$900,000 per $1Billion spent by an enterprise can quickly add up to millions of freed up working capital and can be applied to fund any number of investments in the P2P space and beyond.

Read the full Jason Busch article

Tags: , ,
Posted in Supplier Information Management, Technology, Vendor File Mgmt | No Comments »

Supplier Information Management (SIM)

Thursday, April 29th, 2010

A week ago I blogged the answer to some questions about a recent press release regarding our Q1 growth… in the blog I let slip a teaser about a new product…  after a few more queries…  I will reveal the following:

Powered by the underlying Lavante ConnectTM platform which is hands down, the premier tool for driving communication compliance across a supplier population of any size, Lavante has unified their development team of 13souls under one game changing goal: Supplier Information Management (SIM)

This is not what you have read about anywhere else, this is not vaporware, this is not one way.  This is the soup and the nuts.  This is hard ROI…  You get both the industry leading recoveries and the supplier information together.  Pays… for… itself…

This is connection to all suppliers… for all of your departments with workflow and automation and two way communication with the click of a mouse.  This is data and docs and proactive updating based on your needs and controls.  This is much more than you have seen anywhere else but you need to hold on for a few more days…

Blast off is on May 11th in Dallas.

Tags: , , , , ,
Posted in Supplier Information Management, Vendor File Mgmt | No Comments »

Changes Coming to 1099 Reporting

Monday, April 26th, 2010

Amidst all the ruckus over the health care bill that recently passed, several important provisions have largely gone unnoticed. For instance, tucked within the 2,000-some pages of the Patient Protection and Affordable Care Act (H.R. 3590) is a provision that affects 1099 reporting.

Specifically, businesses now will have to file Form 1099s for all payments they make, including those to corporations, that total $600 or more to a single payee in a calendar year, the Journal of Accountancy reports. So, the previous 1099 reporting exemption for corporations will end, other than for tax-exempt organizations. This provision becomes effective for payments made after December 31, 2011. The first 1099s under the new regulations will go out in 2013.

Strategic Recovery

Posted in 1099 Reporting, Tax ID Numbers, Vendor File Mgmt | No Comments »

Building a Case for Vendor File Mangement

Tuesday, March 2nd, 2010

A couple weeks ago, Lavante presented a webinar about vendor file management with Karen Kroll (www.karenkroll.com)  I have been shocked by how much feedback this presentation has generated.  One of the most intriguing topics from the webinar was how to build a case for a vendor file management program.  Although it may require time on your part, the most effective way to create management support for you to contract resources to help clean your vendor file is to perform some quantifications about what your out of control vendor file is costing you.  Some of the things we suggested during the webinar were to quantify the following:

  • Value of time spent resolving payment errors
  • Customer service costs associated with payments sent to wrong location
  • Costs of reissuing checks
  • Time spent setting up vendors multiple times in error
  • Costs of NOT using automated payment technologies
  • Time is wasted trying to find and verify accuracy of vendor information.
  • Inability to take early-payment discounts, confirm contract terms are being adhered to, or to ensure that employees work with preferred vendors
  • B-Notice Fines Most companies evaluate data quality projects because they qualitatively know these things are hurting them.

Demonstrating the cost of a poorly maintained vendor file will quickly get management attention and support.  I would also offer one other idea that we left out of the webinar because we did not want to make the event a sales pitch.  Our own solution (at Lavante) couples vendor file management and Profit Recovery so that you can drive a hard ROI in addition to many different softer ROI’s outlined above.

In any event, Vendor Files are a universal pain point for most large enterprises and if you are trying to get momentum behind a cleansing project, I strongly encourage tying the project back to dollar saving potential.  You can view the website here:  https://www1.gotomeeting.com/register/393061873 and you can download a white paper here: http://resources.lavante.com/GoogleLeverageVFMaxProfitsWP.html?gclid=COal4ODgmKACFRknawodqz3gnA

Tags: , , ,
Posted in Profit Recovery, Vendor File Mgmt | No Comments »

Lavante highlighted in “The Future” of AP Automation Article.

Saturday, February 20th, 2010

Fantastic edition of AP Matters Magazine arrived in the mail today.  Lavante was feature in the AP Automation article quite a bit. 

Here are a few of the words about us from the “Future” of automations section…   “Lavante, which operates in a paperless environment…has grown rapidly since the development of its on-demand strategic recovery portal and is now expanding to offer a self-service vendor portal that enables vendor on-boarding, updating of critical data, and uploading of documents for shared visibility across a client’s entire enterprise; and TIN management services, which automate the process of collecting and matching a vendor’s W-9 form and its tax identification number, or TIN, with the IRS. The company is developing additional portal-based features for future release.”

Read the entire article: http://www.iappnet.org/ViewItem-1502.do

Posted in IAPP, Profit Recovery, Vendor File Mgmt | 2 Comments »

Taking Pride in your Organization

Saturday, February 20th, 2010

I was in LA early this week and at the National Association of Payables and Procurement and I gave a case study presentation with my client Ellen from Holland America Line.  Ellen and I had gone through a couple dry runs of the presentation and we were pleased with how it had come along. 

The information and the story were great, but I am no graphic designer and the powerpoint graphics left a little to be deisred.  Not wanting the presentation to be too dry, I added a few images of the Holland America Lines cruise ships.  These are very impressive and majestic vessles, and the images were very striking.  Ellen and I hunched over my computer for a last review before our case study and she saw the photos for the first time.  Out loud, she said almost wistfully, “what a pretty ship” and then she took another moment and spoke again, “it really is gorgeous.” 

Ellen has worked for HAL for 26 years, she has been on her share of cruises and she has seen the entire fleet in photos and in person more times than she can remember, but after all of this, she is still moved to the point of calling her ships “gorgeous” when presented with their image.  I hope everyone reading this blog can feel as proud of their company as Ellen feels for hers. 

Everyone of us deserves to be as impressed with the product that their company produces.  I understand that we are not all in the cruise line industry and falling in love with our product may not be as easy for us, but we should always seek to find some part of our work that makes us proud.  In my own situation, I work for a company that performs profit recovery and optimizes vendor data for Fortune 10o0 companies.  It is not always the most glamorous work, but it is wonderful work when I see how much we deliver to our clients and how they feel about working with us.  

At the end of  the case study Ellen produced a stack of business cards and held them up in front of about 50 people.  She offered to hand out a card and have a conversation with anyone in the room that was planning a recovery audit in the next year.  As she put it, She “loved working with Lavante.”  In all her 26 years she said that she had never  enjoyed working with recovery auditors until engaging with us.  I guess her comments are something that I can be proud of.

Tags: , , , , , ,
Posted in Industry Associations, Profit Recovery, Vendor File Mgmt | 2 Comments »

Poor Vendor Data Impacts Your Bottom Line

Thursday, February 18th, 2010

While it may not be obvious at first glance, your vendor files offer more than information on contacting your firm’s suppliers – they are also a resource that can be used to cut expenses and boost your firm’s bottom line. To take advantage of the opportunities to do this, however, you need accurate data that is continuously maintained.

For all firms, this presents an ongoing challenge because data becomes outdated almost as soon as it’s captured. As Bill Swanton, vice president and research fellow with AMR Research says, “Data quality is an elusive goal for most companies because it’s treated as a one-time event. No matter how well they do it, the data begins to decay immediately.”

As Swanton indicates, data accuracy is a moving target. Maintaining accuracy is complicated by the fact that it’s often difficult to dedicate the resources needed for a solid, ongoing data management program. After all, it’s one item on a long To-Do list within most accounts payable departments. Often, it’s bumped aside by other responsibilities that have greater urgency. What’s more, it’s easy for data to accumulate, which increases the difficulty of managing the files.

However, failing to proactively manage your vendor files will result in extra work, which ultimately costs money. In addition, it means foregoing opportunities to reduce expenses and make money.

Posted in Vendor File Mgmt | No Comments »

Vendor File Webinar

Sunday, February 14th, 2010

I was impressed with the level of participation in Thursday’s webinar on leveraging you vendor file to maximize profits.  Karen Kroll and Sherry DePew are experts to be sure and I thought their content was great.  What was most impressive were the emails that followed.  Many of the attendees sent follow up questions and inquired about downloading the webinar for their personal archive.  I asked one of the attendees what was so compelling about the webinar, vendor file management or profit recovery?  I found the answer very interesting…  She said it was relevant that there was a way to manage the vendor file and rather than costing resources to perform that function a company could actually derive ROI from the process.

Tags: , , , ,
Posted in Vendor File Mgmt | 2 Comments »