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The Accounts Payable & Procure-To-Pay

Conference & Expo is produced by:

How To Clean Up Your

Vendor Master File

and Keep It Clean

Jon Casher President

Casher Associates, Inc.

May 24, 2016

Slide 1




Before We Begin Why You Need A Clean Vendor File Vendor File Issues When to Clean Up Your Vendor File(s) How NOT to Do a Vendor File Cleanup A Vendor File Cleanup - Process Overview Before Cleanup Cleanup After Cleanup Third Party Resources Questions One Final Point

Agenda

Slide 2




Before We Begin

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Serial Entrepreneur Founded Casher Associates in 1976 to design and develop custom financial

systems and back office automation Co-founded CM Associates, provider of financial industry software products, in

1985 Co-founded RECAP, an AP Audit firm, in 1988 We did over 250 vendor file cleanups and nearly 100 vendor file conversions and

mergers Director of NASDAQ company, 2000-2006, head of audit committee from 2002

until company went private in 2006

Current Focus Consult to Finance, AP, AR, Treasury and Procure-to-Pay organizations Providers of AP, AR and P2P automation products and services

Training, Certification, White Papers, Surveys, Workshops, Presentations

Before We Begin

My Background

Slide 4




Identify benefits of a clean vendor master file and costs of a messy vendor file

When to do a vendor file cleanup How not to do a vendor file cleanup What to do before starting to cleanup your vendor file How to do a vendor file cleanup How to keep you vendor file clean

Before We Begin

Session Purpose and Goals

Slide 5




Why You Need a Clean Vendor File

Slide 6




Catch / reduce fraud Know your vendors Comply with laws and regulations Know where you spend money Controls costs and save money Reduce duplicate and other erroneous payments Make accurate and timely vendor payments


Overview

Slide 7




Other than investments, 30-70% of all funds that flow out of non-financial institutions go out through Accounts Payable

Types of vendor fraud include Invoices with inflated prices Invoices for goods not delivered or services not provided Double billing Collusion with an employee, kickbacks, bribes Fictitious companies Bid rigging and price fixing

Association of Certified Fraud Examiners’ Report to the Nations on Occupational Fraud & Abuse provides additional information and statistics. Most recent report: http://www.acfe.com/rttn/docs/2014-report-to-nations.pdf


Catch / Reduce Vendor Fraud

Slide 8




Name Changes 3%-7% of companies change their name every year Out of approx. 15,000 US stock exchange listed companies, approx. 100 change

their names every month Some name changes are minor, some are significantly different CVS Caremark changed its name to CVS Health Corporation Google changed its name to Alphabet JDS Uniphase Corporation changed its name to Viavi Solutions Inc Ernst & Young changed its name to EY


Know Your Vendors

Slide 9




Some Types of Related Vendors Franchisees Joint ventures Subsidiaries Affiliates Factors Nominees Agents

Vendors operating under multiple names Some vendor relationships you may not know about The 4 largest US banks have a combined total of nearly 20,000 legal entities Most of which are associated with special purpose entities

Kashi Company and Keebler USA, Inc. are subsidiaries of Kellogg Company Zappos.com and Audible.com are 2 of many subsidiaries of Amazon.com, Inc. Standard & Poors and JD Powers and Associates are 2 subsidiaries of McGraw

Hill Financial, Inc. but no longer related to McGraw-Hill Education McGraw Hill Financial, Inc. is changing its name to S&P Global Inc.


Know Your Vendors

Slide 10




Federal IRS Denied, Debarred and Excluded Parties Privacy Bribery

States Sales & Use Tax Abandoned Property / Escheatment Privacy Deadbeat Parents Withholding and Reporting

International Denied, Debarred and Excluded Parties Privacy Bribery Value Added Tax


Comply with Laws & Regulations

Slide 11




Key Strategies Purchase Smarter Negotiate better pricing and rebates Get better data

Process Smarter Reduce manual effort Reduce exception processing

Pay Smarter Improve terms and cash flow Reduce handling costs and postage


Reduce Costs and Save Money

Slide 12




Reduce duplicate/erroneous payments Every major software package checks for duplicates based on Vendor Id and

Invoice # Duplicate check fails if Identical vendor under multiple vendor ids

Variation on vendor name System does not support multiple addresses

Vendor at different remit address is selected Vendor under previous or new name is selected Related vendor is selected

If duplicate vendors are eliminated, over 75% of $ associated with duplicate payments can be eliminated



Slide 13




Reduce stops, voids, reissues, uncashed checks Transactions stopped, voided, reissued or uncashed Wrong vendor selected Payment sent to wrong address Payment never received Payment received by wrong vendor

Several AP Benchmarking reports Approx. half of all companies reissue 1% of all vendor checks, over 25% reissue

more Slightly fewer T&E checks are reissued

Casher analysis of > 250 Vendor Master Files 5-50% of US and Canada addresses do not conform to postal standards/guidelines 2% - 20% have incorrect or missing ZIP/Postal Code >90% of non-US, non-Canada addresses do not conform to postal standards and are

undeliverable as mail



Slide 14




Not vendor file related Proper Goods and/or Services Received/Provided Sufficient Invoice Detail Correct Amount(s) Appropriate Approval(s) Correct Accounting Codes How much to pay

Vendor file related Who to Pay When to Pay How to Pay Where to Send the Payment Regulatory Compliance and Reporting


Make Accurate & Timely Payments

Slide 15




Vendor File Issues

Slide 16




Name entered inconsistently by your staff Vendor changes its name Street Address and/or Lock Box changes Mergers By your organization and by your vendors

Acquisitions By your organization and by your vendors

Divestitures By your vendors

Vendor File Issues

Why Vendor Files Grow

Slide 17




Multiple Systems Purchasing and AP use Different Files Data Quality and Consistency Missing Non-standard or Inconsistent Invalid Obsolete

Vendor File Issues

Some Problems

Slide 18




20% - 80% of vendors in current vendor master files have had no activity within the last 12 months

35% - 65% of “active” vendors are one-time vendors 3%-7% of vendors change their name annually 20% of vendors change their HQ address annually Phone #(s), Contact Name(s), Email Addresses and Banking

Information also change The bigger your vendor file, the more duplicates you probably have 1-100 vendors - no duplicates 100 - 1,000 vendors - 1% - 3% redundant 1,000 - 10,000 - 2% - 6% redundant 10,000 - 100,000 - 4% - 10% redundant > 100,000 - > 10% redundant

Vendor File Issues

More Problems and Some Metrics

Slide 19




When to Clean Up Your Vendor File(s)

Slide 20




Converting to a new ERP or Financial Accounting system Doing an e-Invoicing, e-Payment or vendor portal on-boarding project Merging 2 or more systems To address new regulatory reporting requirements After a significant fraud was detected Faced with regulatory compliance investigations, fines or lawsuits


Triggering Events

Slide 21




Recommended by an AP Audit firm The person who handles vendor file maintenance is leaving The number of vendors in your vendor file is significantly greater than

your monthly invoice volume


Other Reasons

Slide 22




How NOT to Cleanup Your Vendor File

Slide 23




Get a copy of your vendor master file and download into Excel Sort the file by name Start with the As Flag duplicates Note corrections Manually update system with corrections and changes Give up by the time you get to C


Typical Cleanup Approach

Slide 24




Time is wasted reviewing vendors that should be dropped At least half of all duplicate vendors are missed Changes are often inconsistent, incomplete or incorrect Many problems are missed New problems are created as fast or faster than old problems are fixed Rules to keep the file clean are never documented


What’s Wrong With Approach

Slide 25




A Vendor File Cleanup Process Overview

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Phase 1 – Before Cleanup Should take 2 weeks

Phase 2 – Cleanup Should take 3-4 weeks but may take a little longer depending on cleanup

approach, # people doing the cleanup and # vendors, addresses and other records to be cleaned up

Phase 3 – After Cleanup Initial activities should take 1 – 2 weeks Ongoing activities should continue forever

A Vendor File Cleanup Process

Overview

Slide 27




Assess current situation Identify and review potential guidelines and standards Get copies of key vendor files/tables and related transaction and

validation files/tables Analyze to assess data quality of all data Perform purge/block analysis Analyze to assess selected data Document findings and recommendations


Overview - Phase 1 – Before Cleanup

Slide 28




Close open items Purge or block vendors Purge or block addresses Purge or block records in other files/tables Decide what to clean up, exclude, defer Download records to be cleaned Do an address cleanup Deal with name problems and issues Deal with name standardization Deal with other fields Implement a strategy to find duplicates Once you find duplicates Decide how to make updates Make Updates


Overview - Phase 2 – Cleanup

Slide 29




Re-assess Enhance data for existing vendors Continuously improve

A Vendor File Cleanup Program

Overview - Phase 3 – After Cleanup

Slide 30




Before Cleanup

Slide 31




Survey current situation Identify ALL vendor files and data sources including those used for e-

procurement, e-payment, p-cards and feeder systems Identify and collect ALL relevant documentation Review and verify your actual Vendor Setup and Maintenance Processes and

Controls against documentation Understand features and limitations of your system(s) Minimum and maximum field lengths Data types, default values and edit checks Number of name and address lines Various types of names such as Lookup name, Name on check, Legal/Tax

name, Short name, etc. Various types of addresses such as Buy From, Remit To, etc. Controls, audit trails, reports of additions, changes and deletions How changes and deletions affect historical data Files and/or tables that may need to be changed and/or are affected by changes

Before Cleanup

Assess

Slide 32




Name Standards and Guidelines For various types of name fields

Name Continuation Standards and Guidelines When name can not fit into a single field

Name Qualifier Standards and Guidelines Such as Doing Business As, Care Of, Person’s Title, etc.

Name Prefixes e.g. MR, MS, PROF, REV, DR, etc.

Name Suffixes – Generational and Accreditations e.g. SR, JR, II, III, IV, CPA, MD, PHD, APM, APS, etc.

Before Cleanup

Identify/Review Standards & Guidelines

Slide 33




Address Standards and Guidelines Internal Addresses Postal Delivery Addresses

Other Standards and Guidelines Phone Numbers Tax Identifiers Payment Terms Payment Methods 1099 Type Bank Routing Code Account Numbers etc.

Before Cleanup


Slide 34




Name Standards and Guidelines All uppercase characters No commas or periods No name prefixes Handle THE consistently Drop THE unless vendor name is THE followed by a single word

Do not use 21 other special characters (punctuation) \ $ : ; _ + ^ < > * | = { } [ ] ! ? “ ` ~

Avoid using 9 other special characters (punctuation) @ % & ‘ / - # ( )

Use consistent standard abbreviations Do not put name qualifiers within name field

Before Cleanup


Slide 35




Name Standards and Guidelines (Cont’d) US Federal Government Departments and Agencies US followed by rest of name

e.g. US DEPARTMENT OF TREASURY

State Governments STATE OF xxxxxxx

other information in second name or first line of address Kentucky, Massachusetts, Pennsylvania, Virginia are COMMONWEALTH OF

xxxxxxx Local Governments CITY OF xxxxxxx yy where yy is the 2 character state code

other information in second name or first line of address e.g. CITY OF PORTLAND ME TAX COLLECTOR

US Postal Service US POSTAL SERVICE or POSTMASTER

Before Cleanup


Slide 36




Name Standards and Guidelines (Cont’d) Individuals FIRST NAME M LASTNAME or LASTNAME, FIRST NAME

e.g JOHN Q PUBLIC or PUBLIC, JOHN Q

Other Legal Entities End name with appropriate abbreviation

INC CORP LLP LLC LP LTD PC

Before Cleanup


Slide 37




Name Standards and Guidelines (Cont’d) Others Telephone Companies and Utilities

Name of company Account number in second name or first line of address e.g. VERIZON COMMUNICATIONS ACCOUNT 617-527-3927

Garnishments Name of Garnishor Name of Garnishee in second name or first line of address

Before Cleanup


Slide 38




Name Standards and Guidelines (Cont’d) Others Non-Governmental Organizations (NGOs)

Name of Parent Organization Other information in second name or first line of address e.g. AMERICAN HEART ASSOCIATION MASSACHUSETTS CHAPTER

Fraternal and Civic Organizations e.g. CHAMBER OF COMMERCE, ROTARY, etc. name of chapter

Colleges, Universities, Courts, Agents, etc. Medical Service Providers Middlemen

Agents Nominees Factors Trustees

Before Cleanup


Slide 39




Name Continuations Standards and Guidelines Limit fields to no more than 40 characters even if your software allows more Make sure needed information will be printed on correspondence, checks and

fed to other systems without truncation Do not split words across fields

Name Qualifiers Standards and Guidelines If possible, put each Name Qualifier in a separate field in the following order DBA, AKA, T/A, OBO, FBO, FKA, PKA, In Trust For

Always use a standard abbreviation and either always put slash or never put slash within the abbreviation

These are Internal Addresses or Address Qualifiers not Name Qualifiers Account #, File #, Department Name or Department # ATTENTION, ATTN, etc. CARE OF, C/O or %

Avoid putting Name Continuations and Name Qualifiers in same field

Before Cleanup


Slide 40




Address Standards and Guidelines US Postal Service Guidelines www.usps.com

Canada Post Guidelines www.canadapost.ca

Universal Postal Union Guidelines www.upu.int

All Guidelines Recommend Use uppercase without most punctuation Put Internal Addresses and Address Qualifiers before Street Addresses

Prefix an Account #, File # or Department # with a descriptive word such as ACCOUNT, FILE or DEPT

Use ATTENTION or ATTN Use CARE OF, C/O or %

Validate postal codes and add ZIP+4 for US addresses

Before Cleanup


Slide 41




Address Standards and Guidelines US Postal Service Guidelines Name Line(s) Internal Address Line(s)

Also called Company/Contact Information Delivery Address Line

Also called Distribution and Delivery Address Information Last Line

Also called City, State, ZIP+4 Line Last Line for non-US Address

Also called Country

Before Cleanup


Slide 42




Address Standards and Guidelines (Cont’d) USPS Name and Internal Address Lines

Attention Line or Recipient Line Name Prefix First Name Middle Name or Initial Surname Suffix Title

Professional Title Division/Department Name Mailstop Code Business/Firm Name

Before Cleanup


Slide 43




Address Standards and Guidelines (Cont’d) USPS Delivery Address Line Components PO BOX followed by box number or letters Street Address

Primary Address Number - 1 rather than ONE Pre Directional - N, S, E, W, NE, SE, NW, SW Street Name - 1ST rather than FIRST, etc. Street Suffix - ST, AVE, BLVD, RD, etc. Post Directional - N, S, E, W, NE, SE, NW, SW Secondary Address Identifier - FL, STE, APT, etc. Secondary Address Qualifier - 1,etc.

Special rules for Rural, Highway, Puerto Rico, etc.

Before Cleanup


Slide 44




Address Standards and Guidelines (Cont’d) USPS Last Line Components Also called City, State, ZIP+4 Line CITY or municipality name

spell out NORTH, SOUTH, EAST, WEST, SAINT, MOUNT, FORT, etc. one space STATE - 2 character US State Code one or two spaces ZIP Code - 5 digit or 9 digit (including dash) Zip+4

USPS Last Line for non-US Addresses COUNTRY NAME

Before Cleanup


Slide 45




Address Standards and Guidelines Canada Post Guidelines Name Line(s) Internal Address Line(s) Civic Addresses (Street Addresses) Last Line Last Line for non-US Address

Before Cleanup


Slide 46




Address Standards and Guidelines (Cont’d) Canada Post Guidelines Rules shown here are for English language Similar rules are defined for French language Name and Internal Address Lines Additional Delivery Information Civic Address Line 1 Civic Address Line 2 Last Line for non-Canada Address

Before Cleanup


Slide 47




Address Standards and Guidelines (Cont’d) Canada Post Name and Internal Address Lines

No specific rules are defined Their examples are similar to USPS

Additional Delivery Information Optional data such as title, floor, etc.

Before Cleanup


Slide 48




Address Standards and Guidelines (Cont’d) Canada Post Civic Address Line 1 Components PO BOX

PO BOX followed by box number or letters no # Station Information

Street Address Unit Number Civic Number Civic Number Suffix Street Name Street Type - ST, AVE, BLVD, RD, etc. Street Direction - N, S, E, W, NE, SE, NW, SW

Special rules for Rural, General Delivery, Bilingual, US, etc.

Before Cleanup


Slide 49




Address Standards and Guidelines (Cont’d) Canada Post Civic Address Line 2 Components Municipality Name one space Province - 2 character Canada Province Code two spaces Postal Code

3 characters one space 3 characters

Last Line for non-Canada Addresses COUNTRY NAME

Before Cleanup


Slide 50




Address Standards and Guidelines (Cont’d) Universal Postal Union (UPU) Standards Fields such as City, Province, Region may come before or after Postal Code

depending on Country UPU has 1-2 page PDF files with address format standards for 200+ countries Country name should never appear on last line for mail going to an address within the

country of the originating party Country name should always appear on last line for mail going to an address out of

the originating country

Before Cleanup


Slide 51




Other Standards and Guidelines Phone Numbers Taxpayer Identifiers US - SSN, EIN, ITIN Canada - SIN, BIN European Union – VATIN (VAT Identification Numbers)

Payment Terms and Default Discounts 1099 Categories or Types Bank Routing Codes and Account Numbers Minority, Women Owned, Small Business, etc. Default G/L Code Classification Codes Certifications Insurance Certificates Email Addresses Web Sites SIC and NAICS Codes Contact Names

Before Cleanup


Slide 52




Get copies of your Vendor master file(s) including name, address, contact and account information Validation tables Transaction activity (PO, Invoice and Payment) data

Download data into Excel , Access or other database package Make sure to download all fields in all relevant files/tables Make sure that field such as Zip Codes, Tax Ids, Invoice Numbers, etc. that may

have leading zeros are handled properly Often best to extract into a delimited text file using a special character such as |, { or [

but not comma or tab as a delimiter Create a spreadsheet or table with all fields defined as text and import the data If possible check to be sure that records are not truncated

Before Cleanup

Get Copies of Your Vendor Files/Tables

Slide 53




Analyze all fields in all files/tables for patterns, issues, bad values, inconsistencies

Some of the types of problems you’ll find Mixed or lower case Special characters Names, name continuations and name qualifiers in address fields Inappropriate abbreviations Inconsistent formats, invalid or missing data Fields that have too many or too few characters (e.g. phone #s, tax ids) Data in the wrong fields or field that should not be used Values such as DO NOT USE, CLOSED, INACTIVE, SEE, DNU, etc. where a

name or address should be Do frequency counts of values in individual fields Sort the data ascending or descending on individual fields Filter each field to find special characters that should not be used

Before Cleanup

Analyze and Assess Data Quality

Slide 54




Identify Inactive Vendors Ignore “recently” added records

Identify One-Time Vendors Identify Low Activity Vendors Ignore “recently” added records

Identify Inactive Addresses Ignore “recently” added records

Identify Active Addresses for Inactive Vendors May need to also look at Contacts and records in other files/tables

associated with vendors Some ERP and Financial Accounting systems have upwards of 20 such

files/tables

Before Cleanup

Purge / Block Analysis

Slide 55




Based on activity decide which vendors, addresses, etc. to exclude from additional analysis Typically should exclude records with no activity in last 12 or 18 months except

those added in last 90-180 days Use a shorter time frame if converting to a new system Also exclude records associated with vendors that can be identified as Employees Already marked for purge or as inactive One-time vendors Vendor setup for making customer refunds Vendors created from automated feeds from other systems

Analyze selected data similar to initial review

Before Cleanup

Analyze and Assess Selected Data

Slide 56




Identify changes to procedures and controls Decide on standards, guidelines and/or rules for each field Decide on appropriate validation table entries Decide on purge / block criteria a Decide how to implement purging / blocking with your ERP, Financial

Accounting and other systems Sometimes addresses need to be dealt with before vendors

Decide how changes will be made to vendor file(s)/table(s) and related file(s)/table(s)

Prepare action plan with detailed steps, resources, time frame, effort, etc.

Before Cleanup

Document Findings and Action Items

Slide 57




Cleanup

Slide 58




ERP and Financial Accounting systems may not allow a vendor or address to be purged or blocked if there are open items with a vendor and/or an address

Close completed and expired POs Review, resolve and complete, cancel or close invoices on hold ,Reconcile open disbursements and close those that are not still

uncashed

Cleanup

Close Open Items

Slide 59




Vendors with no activity within last X months added more than Y days ago If you software has a last activity date, determine if it our actual transactions

should be used to determine the cutoff For X,15-18 months is a good cutoff, 12 is usually too short For Y, 90 or 180 days is a good cutoff

Vendors with Do Not Use or equivalent in Name or Address fields Vendors that you “know” are no longer needed One-Time Vendors Low Active Vendors Vendors used once or very infrequently

Cleanup

Purge or Block Inactive Vendors

Slide 60




Inactive addresses Use criteria similar to those used for vendor records

Active addresses for vendors that are purged or blocked Some ERP and Financial Accounting systems require these records to be

purged or blocked before vendors are purged or blocked

Cleanup

Purge or Block Inactive Addresses

Slide 61




Records in other files/tables associated with vendors and addresses that are being purged or blocked

Records in other files/tables that are obsolete or no longer needed Such files/tables may include Contacts Locations Disbursement/ACH or account information

Cleanup

Purge or Block Other Related Records

Slide 62




Existing records or only future additions/changes Exclude classes of vendors e.g. blocked, employees, customer refunds, vendors setup in other systems

Prioritize cleaning of vendors and other files/tables High transaction volumes High dollar volumes Strategic Recent problems 1099 Vendors

First clean up and standardize selected fields Taxpayer Identifier Phone Number Other

Make sure revised vendor maintenance procedures are documented and people are trained to use them

Review and revise action plan

Cleanup

Decide What to Clean, Exclude and Defer

Slide 63




Get copies of your file(s)/table(s) to be cleansed Vendor, address, contact and account information Validation tables , if changed

Filter records to drop excluded before or after downloading Download data into Excel , Access or other database package Make sure to download all fields in all relevant files/tables Make sure that field such as Zip Codes, Tax Ids, Invoice Numbers, etc. that may

have leading zeros are handled properly Often best to extract into a delimited text file using a special character such as |, { or [

but not comma or tab as a delimiter Create a spreadsheet or table with all fields defined as text and import the data If possible, check to be sure that records are not truncated

Cleanup

Download Records to be Cleaned

Slide 64




Use 1 or 2 mailing list cleansers to make a first pass at helping to standardize and enrich address, phone and/or email address information These will typically not help on cleaning or standardizing vendor names Mailing list cleaners offer a wide range of cleaning, deduping and standardization

services or self service software While these can be used for a first pass, the quality and accuracy of cleansing of

AP vendor information is often not sufficient Make sure the provider’s service or software is CASS certified and they can add

ZIP+4 to US addresses Do not provide tax identifier, bank routing or account number information

Cleanup

Do an Address Cleanup

Slide 65




Rates vary greatly but cost of services is usually on the order of a few (3-5) dollars per thousand records with some requiring a minimum and/or setup fee

Cost of software can range from free to a few hundred dollars Each service and software solution is imperfect and may introduce

errors Some of the problems and changes to look out for Handling of name continuations and name qualifiers “Vanity” addresses PO BOX Addresses Dual Addresses Changes to City, State and/or Zip/Postal Code Non-US addresses CMRAs (Commercial Mail Receiving Agencies)

Cleanup

Do an Address Cleanup (Cont’d)

Slide 66




If you use two services and/or software packages and both produce identical results it is likely that the results are usable but should be inspected Merging such data from multiple sources can be complex

One very useful piece of data that is usually provided is Zip+4 If you use software that provides a database to you, make sure that it is

the current USPS data as there are many changes every month Do not import results into your system

Cleanup

Do an Address Cleanup (Cont’d)

Slide 67




Your own company, subsidiaries, affiliates Employees Officers and directors and related companies External audit firm(s) Sensitive vendors Vendors set up or referenced in other systems

Cleanup

If Possible, Flag Selected Vendors

Slide 68




Names containing special characters Periods and commas Parentheses, Apostrophes, Hyphens and Slashes

Names beginning with DR, MR, MS, etc. Names beginning with THE Names with other non-alphabetic special characters Names beginning with DEPT or DEPARTMENT Names that are too long to fit in 40 characters and/or extend into

address fields Unusual abbreviations Name qualifiers such as: ATTN, D/B/A, C/O, A/K/A, T/A, K/A, F/K/A, FORMERLY, F/B/O, O/B/O, etc.

Cleanup

Deal with Name Problems and Issues

Slide 69




Decide which of the following classes of vendors should have names standardized Federal Government Departments and Agencies State Governments Local Governments Postal Service Individuals Telephone Companies and Utilities Non-Governmental Organizations (NGOs), Fraternal and Civic organizations Garnishments Petty Cash Other (e.g. Universities, Courts, Agents, Medical Service Providers, Middlemen)

Cleanup

Deal with Name Standardization

Slide 70




Search Name and Address fields for the following words: AGENCY BUREAU DEPT or DEPARTMENT DIVISION

Search Name field for Names that begin with US followed by 1 blank, U.S., U S, or U. S. Names of common agencies, departments, etc. e.g. IRS, TREASURY, EPA

Cleanup

How to Find US Government Vendors

Slide 71




Search Name and Address fields for the following words: Names of the 50 states Two character state codes followed by 1 blank Variations on abbreviations for DC, NC, ND, NJ, NM, NY, SC, SD and possibly

other state names 1 blank followed by two character state codes STATE or COMMONWEALTH REVENUE, SECRETARY, TAX, TREASURER

Cleanup

How to find State Government Vendors

Slide 72




Search Name and Address fields for the following words: BORO, BOROUGH, CITY, COUNTY, PARISH, TOWN, TOWNSHIP, VILLAGE AGENCY, AUTHORITY, BOARD, BUREAU, CLERK, COLLECTOR,

COMMISSION, DEPT, DEPARTMENT, DISTRICT, GOVERNMENT, RECORDER, REGISTER, REGISTRAR, TAX, TREASURER, TREASURY

POLICE, FIRE, SHERIFF, SCHOOL, DIST, ISD (which stands for independent school district)

Cleanup

How to find Local Government Vendors

Slide 73




Search Name and Address fields for the following string of characters: POST

Cleanup

How to Find US Postal Service Vendors

Slide 74




Hopefully, 1099 flag is set to Y Exclude LLCs, some Attorneys, some Medical Service Providers

You will probably miss a significant number of such vendors Put in place a process on an ongoing basis to check when transactions are

entered for vendors

Cleanup

How to Find Individuals

Slide 75




Hard to find based solely on name and address information Best to find vendors based on invoice transactions posted to relevant

General Ledger codes You will probably miss a significant number of such vendors Put in place a process on an ongoing basis to check when transactions are entered

for vendors

Cleanup

How to Find Telcos and Utilities

Slide 76




Hard to find based solely on name and address information but can search for common names

Best to find vendors based on invoice transactions posted to relevant General Ledger codes You will probably miss a significant number of such vendors Put in place a process on an ongoing basis to check when transactions are entered

for vendors

Cleanup

How to Find NGOs & Fraternal Orgs

Slide 77




Hard to find based solely on name and address information but can search for common names

Best to find vendors based on invoice transactions posted to relevant General Ledger codes You will probably miss a significant number of such vendors Put in place a process on an ongoing basis to check when transactions are entered

for vendors

Cleanup

How to Find Garnishments

Slide 78




Search Name and Address fields for the following strings of characters: PETTY CASH

Ideally, you do not use petty cash and have no vendors set up for petty cash

Cleanup

How to Find Petty Cash Vendors

Slide 79




Search Name and Address fields for the following strings of characters: COURT APPEAL SUPREME

Cleanup

How to Find Courts

Slide 80




Hard to find based solely on name and address information but can search for common words in Name and Address fields ON BEHALF OF FOR THE BENEFIT OF OBO, O/B/O FBO, F/B/O

Also find vendors based on invoice transactions posted to relevant General Ledger codes You will probably miss a significant number of such vendors Put in place a process on an ongoing basis to check when transactions are entered

for vendors

Cleanup

How to Find Agents

Slide 81




Hard to find based solely on name and address information but can search for common words in Name and Address fields HOSPITAL MEDICAL GROUP

Also find vendors based on invoice transactions posted to relevant General Ledger codes You will probably miss a significant number of such vendors Put in place a process on an ongoing basis to check when transactions are entered

for vendors

Cleanup

How to Find Medical Service Providers

Slide 82




Search Name and Address Fields for the following strings of characters: COLLEGE UNIV REGENT INSTITUTE

Cleanup

How to Find Colleges and Universities

Slide 83




Phone and Tax Id problems and issues Too Short, Too Long, Meaningless, Missing Multiple formats used

Other Fields you may want to cleanup and standardize 1099 Categories / Type Vendor Type and/or Vendor Class Payment Terms and Default Discounts Bank Routing Code and Account Number Minority, Women Owned, Small Business, etc. Default G/L Code Other Classification Codes Certifications Insurance Certificates Email Addresses Web Sites

Cleanup

Deal With Other Fields

Slide 84




Develop a strategy for finding duplicate and related vendors and addresses

Perform duplicate matching on cleaned up / standardized fields Key fields for finding possible duplicate vendors Name Taxpayer Identifier Phone Number(s) Bank Routing Code and Account Number

Key fields for finding possible duplicate addresses Name Delivery Address Line Zip Code or Postal Code Zip+4 is extremely useful

Search for matches on 1 or more of the above

Cleanup

Implement a Strategy to Find Duplicates

Slide 85




Create partial name, partial address, partial tax id, and/or partial phone number Partial name should keep first letter of vendor’s name, drop vowels and keep

only 4 characters from each word Partial address should keep first 4 characters of vendor’s address but drop

variations of the phrase PO BOX Partial tax id should drop hyphens Partial phone number should drop area code, extension, and special characters

Search for matches on 1, 2, 3 and 4 of the above If you look at only 1 field, there will be many false matches The number of matches and number of false matches decreases rapidly as you

look at multiple field matches

Cleanup

Enhanced Strategy to Find Duplicates

Slide 86




Review matches and determine which are duplicate or related vendors In trying to find related vendors Same Vendor Same Franchise Parent-Child Many of these will not be found without using more costly third party databases

Review possible duplicates and decide Impact of rules on other files/tables Which to keep Which to drop Which to merge This is not easy

Cleanup

Once You Find Duplicates

Slide 87




Two options Under either option Do not overwrite more recent changes Make sure there is an audit trail of changes

Option 1 Extract cleansed data from Excel, Access or other database and put into a form

consistent with your system’s upload facility If you don’t have existing software to do mass updates, automatically check for more

recent changes and maintain an audit trail of changes, do not take this approach Software may be available from third parties to do this At least one company offers a solution for Oracle that works very well Other companies are or may be working on software for other ERP packages

Cleanup

Decide How to Make Updates

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Option 2 Create update sheets that have fields in the same order as on your system’s

vendor update screens Old and new data should be side by side For new data, values should be printed both as text and bar code Use a bar code reader (pen) to scan new data One person can typically update between 250 and1,000 vendors per day

Cleanup

Decide How to Make Updates (Cont’d)

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Field Old Value New Value Vendor Id 12345 12345 Name Casher Associates, Inc. CASHER ASSOCIATES INC Address 1 110 Pond Brook Road 110 POND BROOK RD City State Zip Newton, MASS 02467 NEWTON MA 02467-2648 Phone 617-571-3890 617-571-3890

Cleanup

Sample Update Sheet for Option 2

Slide 90




After Cleanup

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Verify new adds and changes against guidelines and standards Include IRS TIN matching as part of your vendor maintenance process Review and revise procedures and guidelines documentation, as

required Train and/or re-train, as required Check audit trail of additions, changes and deletions for compliance Implement best and appropriate practices

After Cleanup

Re-Assess

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Check vendors against various denied, debarred, restricted and excluded parties Check vendors against OFAC / FTO list and other lists using SDN Search

Use IRS TIN matching Verify Name and TIN consistency against IRS data

Augment from 3rd party databases Add D&B Numbers Add SIC or NAICS codes Add credit information Add parent-child information

After Cleanup

Enhance Data for Existing Vendors

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Augment via contact with vendor Obtain W-9 or appropriate W-8 Obtain Minority Owned, Women Owned, Small Business, Veteran, Disabled

Veteran, Insurance Certificate, Certification(s), etc. Obtain information to categorize vendor Obtain contact name(s), phone number(s) e-mail address(es) Obtain web site(s) Determine if vendor takes P-Cards if you have a P-Card program Sign up vendors for payment via ACH or FEDI

After Cleanup

Enhance Data for Existing Vendors

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Verify and Authenticate Vendors Make it easier for vendors to do business with you Evaluate vendor performance Provide written guidelines and post on the Internet For other departments For vendors

Provide better information to vendors Transact electronically Keep current on standards, guidelines and regulations

After Cleanup

Continuously Improve

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Third Party Resources

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TIN Matching, 1099-MISC, 1042S, etc. Internal Revenue Service - www.irs.gov

Standard Country Names and Codes International Standards Organization - www.iso.org

US Addressing Standards United States Postal Service - www.usps.com pe.usps.gov/text/pub28/welcome.htm

Canada Addressing Standards Canada Post - Postes Canada - www.canadapost.ca www.canadapost.ca/tools/pg/manual/default-e.asp

International Addressing Standards Universal Postal Union - www.upu.int


Standards and Guidelines

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Telephone Number Formats International Telecommunications Union - www.itu.int en.wikipedia.org/wiki/National_conventions_for_writing_telephone_numbers

Name Changes OTC Markets - www.otcmarkets.com Corporate Affiliations - www.corporateaffiliations.com

Fraud Kroll Global Fraud Reports - fraud.kroll.com/report-archive Association of Certified Fraud Examiners Report to the Nations -

www.acfe.com/rttn/docs/2014-report-to-nations.pdf

Search wikipedia.org for other resources


Standards and Guidelines

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Questions

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One Final Point

“Managing Your Master Vendor File is a Process not a Project.”

Jon Casher Employer Practices Summer 1999

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Jon Casher Snail Mail Casher Associates, Inc. 110 Pond Brook Road Newton MA 02467-2648

Web Site www.casherassociates.com

Email [email protected]

Phone 617-571-3890

Contact Information

Slide 101

http://www.casherassociates.com/

mailto:[email protected]

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