Lavante Recovery is the industry’s premier statement audit product.  The Lavante Recovery application and services are built on the industry’s most powerful platform for communicating with suppliers, collecting AR data, discovering credits and delivering recoveries to clients.  Lavante Recovery targets the entire addressable supplier population without bias and commonly achieves compliance rates above 90%.  It is systematically impossible for any other competitive statement audit process to out-recover Lavante’s process.

Lavante’s outreach includes initial and ongoing requests for AR data as well as follow up requests for non-compliant suppliers.  Follow-up requests alternate by email, fax, mail and phone to maximize exposure and response rates.   Lavante electronically archives all incoming documentation and data per supplier per client for retrieval at any time. Dedicated auditors review all documents for potential credits and communicate directly with the supplier to secure written verification of all claims.  Recoveries are delivered to clients via an on-demand application in weekly batches accompanied by supporting documents and communication detail.

Based on ten years of benchmarking, Lavante has determined that 61% of credit-generating suppliers are distributed throughout the lower 80% of a company’s addressable vendor master file.  Through their expansive review, Lavante delivers clients between $600,000 and $900,000 per every $1 Billion audited.  In addition, Lavante delivers a complete suite of supplier reports and best practice recommendations for vendor file management.

A statement audit, done correctly, should include a review of all addressable suppliers and will uncover 10–20 times the statement audit claims of a traditional recovery audit.  A specialized statement audit firm focuses their attention on nuances of the vendor master file as well as the AR records of the individual supplier.  A proper statement audit includes a thorough review of supplier relationships and should also provide some mechanism for patching the missing and/or inaccurate data that commonly plagues a company’s supplier records. 

Specialized statement audit firms must perform two-way communications with a massive volume of companies and should demonstrate an automated method for soliciting, tracking, re-soliciting (if necessary), collecting, archiving, retrieving, and performing workflow for supplier AR records.  An ideal system will also include consideration for leveraging many different forms of outreach (email, phone, fax & mail) to maximize compliance. 

Considering the communication and work flow demands of a proper statement audit, it is understandable why traditional firms cannot perform the large scale review.  Traditional methods for reviewing client-side data simply do not translate into a successful statement audit.   Only a firm specializing in statement auditing should perform the review.

I am very proud to announce that Lavante SIM was released for general availability on August 9th.  This launch marks the expansion of our vendor file management services into a larger suite of supplier information management products and services.

Lavante SIM has been created specifically to address the feedback that we have received from the market over the years about the challenges that all of you face.   Lavante has learned that supplier information is integral to optimizing relationships with 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 you can leverage into time savings, resource savings and dollars to your bottom line. 

The collection and management of supplier data is more important now than ever based on the growing number of regulations and controls that your departments are faced with.  In that last years alone stricter penalties and controls have accompanied new OFAC screening laws, Sarbanes Oxley and diversity mandates (to name a few).  In just the last few months, 1099 tax legislation was included in the new health care bill which will require you to collect TINs, W-9s and W-8s and to perform 1099 reporting on a larger scale than ever before.  Your companies will likely need to implement new policies and new systems to manage supplier information and stay in compliance.

Lavante SIM has been built as a direct solution to the challenges that you and your departments face.  The on-demand application is the industry’s most advanced solution and enables companies to proactively engage with suppliers on an ongoing basis.  The product drives 8 times the compliance of any other competitive solution and manages communication across the entire supplier lifecycle, from on-boarding, to data capture and validation, to automated maintenance.  Lavante SIM can help you with vendor master file cleansing as well as TIN collection and validation against the IRS website.  The product will even help to reduce costs and labor of ERP installs and upgrades.

We are proud to announce the delivery of this revolutionary product and we are proud to work so closely with our clients to create real solutions to major industry problems.  I encourage you to reach to your Lavante contact person or to visit the Lavante website at www.lavante.com to learn more.

Thanks for taking the time to read this,

Joe Flynn, Founder and CEO, Lavante Inc.

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.

Download the “New 1099 Tax Laws” Webinar for free!

We are still celebrating a huge success surrounding last Friday’s webinar.  With very limited outreach efforts, we overbooked the capacity of our web cast provider and we retained all attendees for the entire event.  Anyone well rehearsed in presenting webinars will acknowledge bth of these data points as huge feats!

Sherry DePew conducted and expert walk-thru of the new 1o99 laws which will dictate the future of 1099 reporting for companies (of all sizes) for the next several years.  The new laws will increase workloads, staffing requirements and exposure to significant non-compliance fines.  Sherry outlined a very realistic plan for getting all the facts and for getting prepared.

We are scheduling many more webinar events about similar and related topics soon.  Please notify us at info@lavante.com to get on our distribution list.

We would love to hear any comments or questions whether you were able to attend of not and we are offering a free video replay of the webinar by clicking on the tile below.

Section 6041 of the Internal Revenue Code outlines 1099 reporting requirements.  The Patient Protection and Affordable Care Act includes an Amendment to Section 6041 which now requires 1099 reporting for any payments aggregating $600 to a supplier per year

The new amendment will now create requirements for reporting for:

• All for-profit corporations (excluding tax-exempt corporations)
• Payments made for Property (goods, merchandise, supplies, raw materials, equipment, etc.)

Companies will be required to submit accurate TIN information or face monetary penalties

The provision in the health care law is aimed to reduce the gap between income that individuals and businesses make and the federal taxes they pay, which the Government Accountability Office estimates is $345 billion

The Wall Street Journal says Congress hopes the new 1099 provision will collect $17 billion more in federal taxes and fees.

What has been changed?

• Before: Most payments to corporations were exempt from Form 1099 reporting requirements. These exemptions include: Providers of Goods, Corporations, Tax Exempt Organizations, Internal Organizations, and Retirement Plans. 1099’s are only required for a small subset of the suppliers where payments were made. This was typically well less than 10% of supplier payments.
• After: Companies will be required to submit 1099’s on all for-profit companies who receive payments greater than $600. This will typically be 95+% of supplier payments.
• The big change: Corporations have been added to the entities that require 1099 reporting this will account for the biggest increase.

What are some details surrounding the timing of the new change?

• New law becomes effective for all payments made after December 31, 2011.
• Companies should plan to start collecting and validating W-9’s & TIN’s for each supplier they will spend more than $600 with for the 2012 year.
• Companies will need to issue and submit 1099’s to suppliers and IRS early in 2013 for the year 2012.

Having closely monitored this impending law for years Lavante can help significantly to help companies automate the collection of W9’s as well as the require IRS TIN-match. At the very least this huge work load can be eliminated. We encourage people to learn more at HERE.

How will this effect AP and other financial personnel at corporations?

The new Legislation poses a significant burden to corporation that must ramp up their reporting efforts.

• Information reporting requirements bring with them the responsibility of obtaining appropriate taxpayer identification numbers (TINs) from suppliers that were not previously subject to Form 1099–MISC reporting.
• If the corporation fails to produce a TIN, or fails to properly perform their 1099 reporting, then backup withholding is required on payments 1099-application suppliers.

The new Legislation also poses a considerable increase to the amount of reporting that takes place within a business’s accounts payable system and department.

• Employers will need to implement the appropriate record keeping and data collection processes to meet the reporting requirements, including, where necessary, processes to effectively communicate the required information to third parties providing payroll administration or managing other reporting obligations.

The monetary risk is expected to increases significantly.  Where companies were experiencing b notice fines at the following levels:

• $50 per each supplier that is not properly reported
• $250,000 maximum potential risk per company

The new legislature increases the levels to:

• $250 per each supplier that is not properly reported
• $1.5M maximum potential risk per company, although some sources have indicated that this number could be higher

Due to the steep increases that the new amendment poses, it is widely believed that the many aspects of the new legislation will go through an appeals process.

When one panelist asked aloud if the room was engaging successfully in the practice only about 3 hands when up all the way…  there were one or two of those “half-up-but-not-really hands.”  I will not call anyone out but among the firms successfully using dynamic discounting were two large fortune 50 stalwarts.  Even they had to admit that they targeted vendors were of a select group and that procurement was still very much debating if they should negotiate longer terms and stay away from the early pay discounts.

Just thought I would shed a little light for those in the crowd that think they missed this train.  The conclusion:  People LOVE the idea of a successful dynamic discounting program and this topic has major buzz, but like most things… not many people can really sustain the practice and it remains in “when-I-have-time-to-get-around-to-it” limbo.

Please comment if you have plans to make this practice work internally or if you have input on the topic.  Would love to get more data on this.

Sherry DePew followed  Joe’s lead with a standing room only workshop where she discussed portals and demonstrated our product. She was held after her session by attendees with lingering question for about thirty minutes.

This is a game changer!  Proud of the new developments and proud to be a Lavantine!

Powered by the underlying Lavante Connect^TM 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.

The Short Answer:

It takes very little of your time or resources to support a Lavante recovery audit.  All you need do is send a basic vendor file and dedicate one employee for typically an hour per week.

How is this possible?

To begin an audit: Lavante can get started working from a data file that in many instances requires less than an hour for clients to generate. AP typically can create the data file Lavante needs and client IT does not need to get involved.  This is all that’s required for a full recovery audit.

To support an ongoing audit: Clients working with Lavante typically require less than one hour per week to receive and upload verified claims and vendor file updates into their system. No onsite Lavante personnel are ever needed to support the effort.

Clients who wish to save additional time can work with their Lavante Account Manager to integrate claims directly into their ERP system.  Lavante will automatically match claims against an internal credit listing, thus pre-checking the credits and enabling clients to upload credits directly as ledger entries with no manual intervention.

Lavante InSight™

For companies concerned about the time commitment or skeptical of the potential benefits of performing a recovery audit, Lavante offers a way for clients to test and sample the service before fully engaging. 

Lavante InSight™ gives you a view of the recovery audit you might have. It generates an estimate of the likely cash recoveries and vendor updates you will receive if you choose to engage in a Lavante Strategic Recovery audit. Utilizing your master vendor file, InSight leverages Lavante’s extensive database of historical audit detail, a proprietary, on-demand software application and our Supplier Network of over two million companies to develop a comprehensive vendor and recovery analysis. InSight previews potential cash recoveries, duplicate and related vendors, recovery projections over time, vendor updates, and more.