Last month I had the pleasure of visiting Minneapolis to participate in two separate events – a lunch & learn session co-sponsored by Lavante, Basware and the IOFM, followed by the Northern Lights IFO chapter meeting. Here, I’ll focus on discussions that took place at the first event, and I’ll return next week with some thoughts about the second presentation.
The lunch & learn which took place at a great steak house in downtown Minneapolis, The Future of AP: Five Changes Coming to AP, focused on some key challenges facing corporate AP professionals. In attendance were individuals from both small to large organizations and across a range of industries (manufacturing, retail, financial services, education, and healthcare).
As usual, the topic elicited much discussion, with considerable attention given to a challenge facing most of those in attendance–that of keeping their vendor master file accurate. While most attendees agreed that they perform an initial validation of the vendor data while setting up the vendor, there was not as high a consensus that they had an on-going system of checks and balances related to changes to existing vendors and on-boarding of new vendors. It was noted that there break-downs in this process caused many critical issues. For example, the same vendor can, and often does, get setup in the vendor master file multiple times. Or, as a result of mergers and acquisitions, related vendors are not identified. These issues can cause companies to miss purchase volume discounts as well as hinder their ability to take credits for returns. Additionally, it is impossible for the organization to calculate an accurate spend file by vendor, which can negatively impact contract negotiations. And this impacts not only finance, but procurement and in the end, the company’s bottom-line.
As we discussed at the event, there are multiple ways to handle the maintenance of data in the vendor master file, but the best practice which I adhered to during my tenure as Supervisor, AP at Rite Aid, is to:
- • Start with a thorough cleansing of existing vendors.
- • Incorporate an ongoing process that ensures new vendors are thoroughly analyzed, compared to the existing vendor master file, with updates made continually.
I found that the most efficient way to accomplish this was to partner with a third party company. Furthermore, that solution should have access to a vendor data network which can be leveraged to assure accuracy of the vendor master file. At the same time the use of a self-service portal application would allow vendors to update information as well as store required documents and validate TIN numbers — in real time. This type of supplier portal will increase collaboration between the buyer and supplier while providing a repeatable, ongoing process that ensures vendor information is accurate, complete and up-to-date.
Lavante has technology-enabled solutions to help deal with this and other related problems – Lavante Recovery+ and Lavante SIM (Supplier Information Management), which offer a way to automate many of these processes through our on-demand, SaaS-based software solutions. With them, users have a way to not only collaborate with suppliers via a web-based tool, but they allow complete visibility in the supplier base to identify related and duplicate vendors (all in real-time!), and to keep vendor information current. Part of this process is collecting and validating critical regulatory items – such as TIN matching and OFAC screening. And, the solutions leverage Lavante’s comprehensive supplier network, which increases vendor data accuracy and speeds up the cleansing process.
Here is one screen shot from the Lavante application showing the supplier compliance dashboard pharmaceutical company, demonstrating the number of suppliers which were updated and possible related suppliers identified through the update process.
For more information about Lavante solutions please visit www.lavante.com
I’ll have more notes on my second presentation in Minneapolis next week. In the meantime, please feel free to contact me with questions or comments.