Vendor Statement Audit Posts

Benefiting from a Prescription for Clean Data: A Case Study

Tuesday, January 24th, 2012

A recent case study developed by Spend Matters details  how a North American and global procurement organization for a top five pharmaceutical company applied a defined exercise and solution implementation from Lavante to discover where it had excess risk exposure, lack of policy compliance, overpayments and other cost driving issues. The procurement organization, which primarily focused on order-to-cash, procure-to-pay, credit and collections was ultimately able to trace all of its challenges in these areas back to weak or missing vendor data.

As the case study details, the company already had some of its vendor data under active management, but many vendor data points required enhanced management. Critical data with inaccuracies included:  remit-to addresses, parent child connections, duplicate vendor entries and incomplete fields including TIN, email and fax numbers.

If the organization had embarked on its data cleansing efforts internally, the benefits would not have cost-justified the task. As such, it decided to work with an external partner. After evaluating a number of providers, this pharmaceutical company selected Lavante based on the power of its underlying technology and the portal it offers to access it. Lavante also offered a breadth of coverage to reach the majority of the pharmaceutical company’s vendors rather than just the top 10-20% of its vendors.

The company implemented the change process by centralizing data quality through one common channel in order to ensure accurate books. To achieve this, the solution was integrated with the pharmaceutical company’s vendor outreach and registration process through four key components: validation, updates, augmentation and de-duplication to primarily find duplicate payments.

To read more about this process, download the full case study by clicking here.
It clearly demonstrates how this global pharmaceutical company was able to recover $5MM in credit opportunities based on a total spend of $10 billion. In order to have the same EPS impact, the organization estimated they would have needed to generate between $50MM and $100MM in new sales.

An underlying platform for credit recovery proved to be the key success factor. Previous, largely manual consultant-led activities focused on only top vendors and their “statement reviews” and led to a lower recovery rate. In contrast, the Lavante platform cast a wider net, and this broader reach resulted in additional recovery opportunities that had been previously overlooked. This was critical for this pharmaceutical company as the top 10-20% of vendors were already “over-farmed” and the next tier down was where the most significant potential for recovery was found.

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Posted in AP Industry, Case Study, IAPP, Lavante, Recovery Audit, Shared Services, Technology, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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New Resources and Best Practices Advice: Lavante In The News

Wednesday, January 18th, 2012

Word is spreading like wildfire. Articles featuring best practices and tips on credit recovery from Lavante have been hitting the streets over the past two months. If you are looking for some expert advice on how best to put dollars back to your bottom line, the following articles may give you the valuable insight you need.

Procedures and Fixes for Vendor File Management,  AP Journal Online, January 2012.
Sherry DePew, Lavante’s vice president of product management, outlines the value of vendor files and an ongoing process for vendor-file cleansing.

Best Practices for Ongoing AP to AR Reconciliation in the Supply and Demand Chain, Accounting Software 411, January 2012
In this piece, Lavante CEO Joe Flynn shares valuable best practices to help companies drive a successful statement audit with their supplier base.

Finding the Dollars in the Haystack, Institute for Supply Management, December 2011.
Here, Henry Ijams, an analyst at PayStream Advisors, offers real world advice on statement auditing, with best practice methodologies in selecting a technology solution to conduct a comprehensive recovery audit that maximizes results. He outlines effective methods to uncover missing credits while reinforcing positive communication and liaison with valued suppliers.

Creative Credits – How Vendors Can Use Your Credits to Their Benefit if You’re Not Looking, Financial Operations, December 2011.
This article, written by Lavante’s vice president of product management, Sherry DePew, gives readers a unique view into the risks associated with leaving vendor credits on the books.

In addition to these resources, you’ll find a wealth of best practices and real-world guidance by joining an upcoming Lavante event or on-demand webinar.

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Posted in AP Industry, IAPP, Lavante, Recovery Audit, Technology, Vendor Statement Audit | No Comments »

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

Tuesday, January 3rd, 2012

Vendor File Cleansing Impacts Multiple Enterprise DepartmentsWithout 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 Director of Global Shared Services for Boise Cascade, and most recently as VP Account Management at Lavante, I’ve experienced some real world examples that highlight how critical accurate vendor data is to any organization.

Here are several examples:

      • When introducing new terms and conditions, a company had to send a letter to all vendors updating them of the changes; unfortunately, a staggering 80% of the letters were returned due to bad information.

 

      • At another organization, increased banking charges were addressed by bringing remittance advice routing in-house. The most expensive and time consuming part of the project was acquiring correct email and fax numbers, which took inordinate amounts of time and money.

 

      • After purchasing a comprehensive e-invoicing solution, one company took more than two years to clean up their vendor information so they could take full advantage of the new technology, resulting in much delayed ROI for the project.

 

      • A group of advertisers placing orders with various media companies started requiring diversity information reports. In order to prevent a significant drop in revenue from these advertisers, one media company had to immediately engage their 30,000 vendors and rapidly find a means of collecting basic supplier diversity information to avoid losing business.

 

      • As a check-fraud-prevention measure, one organization required all suppliers to receive ACH/EFT payments. This requirement cost untold dollars and the company took more than a year trying to contact their suppliers about the policy change due to incorrect, missing and out-of-data supplier contact information.

Because bad data can trickle down your supply chain, it is important to solve issues upstream before the impact becomes contagious. A lack of good vendor data can have a dramatic impact on your organization – from exposure to vendors with credit issues, to reliance on proprietary suppliers for critical components, to the more pedestrian (yet costly) issues that can arise from using vendors not in compliance with your terms and policies.

Good data housekeeping is not only a best practice, it can have a long term positive effect on your company’s overall performance across every department.

To read more about the impact of bad supplier data, take a look at a recent Lavante webinar, hosted with Jason Busch of Spend Matters.  You can also find out more about how Lavante Recovery helps to not only speed dollars to your bottom line, but also automatically handles vendor file cleansing.  Click here to find out more.

Posted in Lavante, Recovery Audit, Shared Services, Technology, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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Seven Tips to Avoid the Impact of Bad Supplier Data

Tuesday, December 6th, 2011

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 Recovery™ solution has located potential duplicate vendors based on phone and fax numbers matching for variously-named suppliers.

 

 

 

 

 

 

 

 

 

 

 

 

From inconsistent naming conventions, to the same vendors located at different addresses, the potential for errors are vast and the impact of this bad data can be dramatic.

Based on a recent research report by Jason Busch and Thomas Kase of Spend Matters, here are the top seven areas to focus on to avoid the costly impact of bad supplier data:

  1. Create an undisputed single point of reference – With processes to automate the supplier registration process, to collect supplier communications in a common repository and to assure data entry accuracy, organizations and dramatically eliminate costly errors.
  2. Adhere to compliance requirements – Technology solutions can build in flexibility to support new compliance requirements by dynamically engaging with vendors around business changes, reducing compliance turnaround.
  3. Assure security and privacy – In partnership with the Information Technology organization, Finance and A/P need to have strong adherence to security and privacy governance for data security, IP protection and information privacy.
  4. Eliminate payment errors – A focus on processes to eliminate payment errors will reduce expenses around reissuing checks, late payment penalties and reduce over-payments and duplicate payments which can occur whenever a vendor is set up twice in the system.
  5. Establish business continuity dependencies – Often owned by the Procurement team, business continuity impacts areas including material costs such as wrong parts, the cost of product or service disruption when stock runs out, operational overhead. It is also important to evaluate sales-side impact prior to making buys-side decisions, especially if a vendor is also a customer.
  6. Minimize overhead for supplier management – By implementing supplier self-service maintenance functions, organizations can minimize internal staff resources for data maintenance activities
  7. Automate using technology – Investments in technology will greatly improve your overall ROI as well as improve a company’s procurement professional utilization which can result in substantial savings.

The full white paper,  Developing and Maintaining Accurate Supplier Data – Overcoming Dirty Supplier Information in Finance and Procurement, includes much more about the importance of keeping vendor data files clean and up-to-date, along with a case study that details how one Fortune 500 Pharmaceutical company used Lavante Recovery to solve the problem and improve its recovery processes.  Click here to download the report.  Or, click here to read more about how Lavante Recovery helps cleanse vendor contact records.

 

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Posted in AP Industry, Lavante, Recovery Audit, Supplier Information Management, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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Lavante is Pleased to Welcome Lennox Industries as a New Lavante Recovery User

Monday, November 21st, 2011

Lennox Industries Selects Lavante RecoveryEarlier this month we announced the addition of a new Lavante Recovery™ customer, Lennox Industries.  I’d like to share with you some of the compelling reasons why they chose our solution over other traditional, manual services.  Not only do these reflect what I see as the key strengths of our technology-driven recovery solution, but they underscore what we continue to hear other companies describe as critical needs in the recovery audit industry.

Lennox selected Lavante, in part, because of our ability to deliver: comprehensive statement audit process;  patented, SaaS technology allowing seamless access to all results through a web-based portal;  speed and ease of deployment which delivers fast, continuous results, and; vendor file management and data cleansing as part of the recovery process.

Lavante’s patented SaaS technology continues to drive a differentiated offering for companies looking to maximize recovery dollars.  Because of our automated processes, Lavante Recovery is able to reach out across the breadth of a company’s supplier base vs. a small sampling which manual process-based services are limited to.  Our web-based portal also provides our users with seamless access to real-time reports and a view of every aspect of the recovery process.

The speed and ease of deployment are other important criteria to Lavante customers.  Our solution does not  require on-site personnel nor extensive, complex data collection procedures, making it fast and easy to deploy.   And in today’s business environment, where companies are forced to take on more and more task with fewer resources, our customers recognize that Lavante Recovery deployment has minimal impact on both AP and IT staff.

Another important feature noted in this announcement is the inclusion of vendor file management and data cleansing as part of the entire recovery process.  Our outreach to the majority of suppliers combined with over 2  million suppliers in the Lavante Supplier Network means that we update and cleanse your vendor contacts, which also helps to identify potential duplicate vendors.

We are excited to be working with Lennox Industries, a leading provider of customized home heating, cooling and indoor air quality products.   Click here to read more about this recent announcement.

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Posted in AP Industry, Lavante, Recovery Audit, Supplier Information Management, Vendor Statement Audit | No Comments »

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Global Cruise Line Uses Lavante to Maximize Recovery Efforts

Thursday, November 3rd, 2011

As part of a larger report published by PayStream advisors earlier this year, PayStream also interviewed a Lavante customer to verify the comprehensive statement audit best practice approach covered in the paper. The findings of this interview are now available, which validates Lavante’s approach to applying technology to help our clients drive a continuous stream of credits to their bottom line, and uncover the root cause of trouble areas so AP departments can work with their counterparts throughout the P2P Process to take quick corrective actions.

We were happy to see that our recovery process was clearly differentiated from both internal review and traditional, manual audit processes. Before bringing Lavante in for a trial, the global cruise line had used in-house processes to track duplicate payments and unclaimed credits before trying two different traditional AP recovery audit firms. The later proved to be too invasive with too few results, and they decided to try Lavante with a small scope.

Based on the results of this smaller project, after a short time the audit scope was expanded to include more recent credits – from a initial 180 days down to 120 days old, and now working on 90 days. This “rolling” time frame is an important part of the statement audit process, as it gives the client’s internal AP process to catch many of the credits. We sit in the background as a safety net, continuously connecting with the company’s suppliers to ensure that credits on these older statements are caught. And, Lavante delivers these credits via our online web portal on a weekly basis.

As the manager of Cash Disbursements stated:

“[Lavante’s] job is to get out there and identify where people owe us money. They let us get this money faster and equally as important, quickly recognize potential errors. They are helping us collect with is due to us and most likely, a lot of this would be missed.”

To read the entire case study, please click here. And, to read the larger white paper which outlines the best practices for a comprehensive statement audit, click here.

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Posted in Lavante, Recovery Audit, Shared Services, Technology, Vendor Statement Audit | No Comments »

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The Connections Between Accurate Supplier Data and High Recovery Credits Discussed in Sourcing Innovation Blog by Michael Lamoureux

Monday, October 24th, 2011

automatically connect with suppliersEarlier this month, Michael Lamoureux, better known as “the Doctor”, posted two very informative blogs on Sourcing Innovation, focused on the process of statement side recovery benefits.  His initial entry, Recovery Audits – Are they Worth It, argues that indeed, with the right technology, the money recovered is significant.  He states:  “… using technology and analysis, some companies are able to recover an average of 600,000 to 1,000,000 in vendor credits for every 1,000,000,000 in a recovery audit… in some cases, the leaders are able to recover 5,000,000 for every 1,000,000,000, and that’s always worth it no matter how big you are.”  These savings expanded even more when the solution provider includes a “SIM-powered” technology, which helps cleanse data and literally clean up problem areas.

His next post, Lavante Recovery – A Risk-Free Way to Segue Into SIM  expands the conversation to discuss Lavante’s Recovery Audit solution, which has built-in SIM-type capabilities.  And, the article continues to cover how Lavante works to “identify omissions, errors, and inconsistencies in your supplier data.”  What I saw as the vision of the two posts is the clear connection Michael makes between clean supplier data (and the ability to keep it updated on a continuous basis) and the ability to drive the maximum recovery effort.

“The benefits of good supplier data and multi-channel reach-out cannot be underestimated where recovery audits are concerned…. With respect to the former, cleaner supplier data makes for more complete transaction data, which not only increases the chance of finding a duplicate, incorrect, or fraudulent transaction — but improves your follow-on spend analysis efforts (and results). As a result of its supplier data cleansing effort, Lavante is typically able to process at least 95% of spend through its recovery audit solution, which maximizes the chances that it will find the majority of your recovery opportunities.”

Our company’s founders, Joe Flynn and Tom Flynn, saw the connections between clean supplier data and maximum recoveries when they built out Lavante’s solution set.  Our SaaS-based solution set starts with an automated outreach to the breadth of our client’s suppliers, and then continues to update records through our supplier network database, now with over 2.3 million suppliers.  The continuous communication with suppliers results in very high compliance, which keeps our client’s vendor records current, driving the maximum amount of credits possible.

Michael is very astute in his observations and analysis.  I have been in supplier management business for 25+ years and very few are able to connect the dots between Supplier Audit Recovery and Spend Analysis.  In a future post I will dig further into Doctor’s comments on how Recovery leads to cleaner supplier data resulting in improved spend analysis, which in turn provides better sourcing and more effective supplier management.

If you are interested in this connection of vendor file management and data cleansing processes, as well as statement audit please visit our website.  And, click here to read more about Michael Lameraux and his Sourcig Innovation.  The two blog postings referenced here can be found at: Recovery Audits – Are they Worth It, Lavante Recovery – A Risk-Free Way to Segue Into SIM .

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Posted in AP Industry, Lavante, Procurement, Recovery Audit, Supplier Information Management, Technology, Vendor Statement Audit | No Comments »

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Lavante Panel Prompts Lively Discussion Centered on Statement Audits & Supplier Portals at the IFO Toronto Conference

Monday, September 26th, 2011

Lavante presents at industry conference
Earlier this month it was my pleasure to moderate a very lively and insightful panel at the Institute of Financial Operations’ conference in Toronto, Canada. Lavante hosted the panel discussion, bringing together leaders from the AP community representing The Four Seasons Hotels & Resorts, Lafarge North America, RIM, and Telus. Panelists focused on Transforming AP through Technology & Automation, with two topics spurring considerable attention and discussion:

Statement Audits: There was considerable interest in the presentation by one panelist who presented how automating the statement audit process using Lavante Recovery has delivered a steady stream of credit recoveries, beyond what was anticipated – in the first year over 1% of auditable spend was recovered. He covered how his company had moved from an inherited manual/paper based system to Lavante’s automated, web-based solution, which has provided seamless access to results through the online web portal. Lavante’s ability to automatically connect to and audit the breadth of suppliers vs. a smaller subset that a traditional recovery process would target, had an added benefit of improving communications and the overall relationship with vendors.

This focus on the importance of supplier relationships spilled over into the next hot topic the panel uncovered:

Supplier Management Portal: The need for an easy, transparent way to connect with suppliers and improve the supplier service function was another hot discussion topic. There were several presentations focused on this topic. One presenter focused on the process now underway to implement a vendor portal to the organization, leading with the findings that internal development of a supplier management portal would be cost prohibitive. Important issues in selecting a vendor were identified as: data integrity, eliminating duplicate vendors, and maintaining an accurate active vendor file. Ease of use, workflow approvals, and an increased turn-around time for approvals were also important elements cited. Questions about what incentives would drive vendors to join the network centered on the benefits vendors would enjoy and the possibilities of customizing the approaches for different types of providers.

I applaud the conference organizers (this was the first IFO conference in Toronto) in including this along with many other technology-oriented sessions at the event. Thank you to all of the panelists and audience members for a thought-provoking session. And, please check our website for more information about Lavante Recovery.

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Posted in AP Industry, IAPP, Lavante, Recovery Audit, Supplier Information Management, Technology, Vendor Statement Audit | No Comments »

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Benefits of Supplier Statement Audits to both AP & Procurment Explored on Spend Matters Site

Tuesday, July 26th, 2011

Statement Audits Benefit AP & ProcurementEarlier this month, Spend Matters published an insightful article written my colleague here at Lavante, Aloke Bhandia, Sr. Director of Product Management. In it, he provides an overview of how the results of a statement audit can benefit not only Accounts Payable, but has the potential to deliver many often overlooked advantages to Procurement.

He aptly states:

“For too long, such supplier credit recovery has been confined to the AP suite as a tool for improving the efficiency of Accounts Payable. With increased focus on the broader P2P process, supplier credit recovery audit results should be more frequently evaluated by the procurement professionals in the context of the larger supplier management process.”

The article, which can be read in its entirety by clicking here, goes on to describe how the statement audit process can also help bring AP and Procurement closer together.

In August, we will post more articles not only on how statement audit is a best practice, but additional ideas about the organizational benefits gained by bringing AP and Procurement close together, with suggestions of how that can be accomplished.

Once you have had a chance to read Aloke’s article on Spend Matters website, I welcome your comments!

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Joint Webinar with Winshuttle Explores Automating Links from AR to AP

Wednesday, July 13th, 2011

Streams of dataLast month, Lavante teamed up with our partners at Winshuttle to offer a unique look at how our combined solution is able to automates a stream of recovered dollars back to your company’s bottom line. During the session, we focused on how our technology solutions work to streamline a company’s SAP financial recovery auditing processes, resulting in lowering transactional errors and credits with suppliers.

The webinar focused on the following:

    * Minimizing the impact and time required to access real-time SAP Financial data
    * Leveraging access into your supplier records to drive dollars back to your company’s bottom line
    * Improving the accuracy of financial data and supplier records in your ERP System
    * Using the Winshuttle/Lavante solution to self-fund the joint-installation of both technologies

Click here to see a short video with an overview of what we discussed in the session.

And, to view the webinar, please click here.

I’d love to hear your thoughts about the material presented.

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Posted in AP Industry, Lavante, Recovery Audit, Vendor Statement Audit | No Comments »

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