Automating master vendor data
A vendor master file is a key resource containing all the critical information relating to an organisation’s suppliers. Ensuring this information is up to date is critical as incorrect and duplicate data can have an impact on the entire purchase-to-payment data cycle.
Today's challenges Even where a business has a small number of suppliers, without regular auditing and cleaning, errors can creep in. This is especially true where a business may recently have undergone a merger or acquisition or has restructured into a shared services environment. It may also simply be the result of a lack of a defined process. For many businesses, keeping on top of supplier data is not seen as a core activity and so audits may only be undertaken once a year.
It’s difficult to quantify the true impact that unclean data will have on your organisation, but some key points areas are:
Time lost: The most immediate impact will be the time your team wastes having to chase the right information when it is not readily available. This often means having to get in touch with the supplier in question, find the right person and wait for the information. This wait may determine payment schedules and cause delays to service, a direct impact to your organisation.
Duplicate records: It is estimated that the root cause of around 25% of duplicate payments come from duplicate records. An Enterprise Resource Planning (ERP) system will not stop the duplicate invoice entry when you enter the same invoice into two different master vendor records. Nearly all ERP systems will work on the basis that there should only be one record for every supplier. Where duplicates exist, many of the controls, will not work.
Fraud: Procurement is one of the most common targets for fraudulent activity. In fact according to the ACFE (Association of Certified Fraud Examiners), billing fraud makes up a massive twenty-two percent of all monetary fraud. When a vendor changes its name, address or bank account to a personal address, these may be signs of fraud.
Missing discounts: Unclean data may mean that an organisation misses out on earned discounts which could be associated with their contract. Many vendors also offer some form of dynamic discounting where a percentage of the cost is reduced in return for a faster payment, which may not be possible where incorrect data is being held.
How can automation support?
The key aspect in creating and maintaining an accurate master vendor file is consistency, which is often difficult when working in an environment where multiple locations or people all have access to a central system. Relying on staff to manually monitor the master vendor file is time-consuming and often ineffective and there are a number of areas where Robotic Process Automation (RPA) can help.
In particular, master vendor set-up and master vendor data changes. A bot can extract data from multiple sources, validate VAT, IBAN, USPS, ABN and check for duplicate entries within the ERP...all without human intervention. This can quickly and easily ensure that all files are up to date and compliant with regulation.
If you'd like to find out more about RPA and the other low hanging fruit then be sure to visit: https://www.proservartner.co.uk/intelligent-automation-rpa