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:
- 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.
- 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.
- 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.
- 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.
- 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.
- Minimize overhead for supplier management – By implementing supplier self-service maintenance functions, organizations can minimize internal staff resources for data maintenance activities
- 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.