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 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.