In a busy accounts department, the number of suppliers on a master supplier database tends to increase between 10-20% per annum.  Therefore, if you have a large database you could be in the position of adding several new accounts every week.   If you add to that the knowledge that 1 in 500 supplier accounts is likely to be a duplicate, or has an inadvertent accounting error on it - what can seem a harmless blip in the system can actually develop into something with which could be potentially disastrous.  In addition, this creates inefficiencies in the accounts payable process and when duplicate payments result - which they do - the costs run into several thousand pounds annually.

Although payment managers are aware of these issues, many simply do not have the time or resources to regularly clean out their master supplier files.  Even if they did, their accounting systems do not have sufficient functionality to cross check against several fields for an accurate analysis.  In fact, a notable approach employed by a number of managers, is to resort to an unsophisticated random culling of the numbers, by applying an “inactivity” time. For example, if a supplier hasn’t been used in the last 18 months then their record is deleted or made inactive. The problem with this method is that some suppliers are actually only used once every few years, resulting in the need for them to be made active, set up and checked again – a process which obviously wastes time.  However, it doesn’t get over the fact that it is extremely likely that duplicates and errors will remain within the active account.

Top 6 ways to protect your master supplier file

1. Centralise Access – ensure there is one person who checks and sets up supplier accounts and every new account request goes through them.
2. Guidelines – provide guidelines & templates for all new supplier accounts. Circulate these to anyone who requests new accounts. Ensure they carry out several checks beforehand and get them to sign off.
3. Checking – Extend the number of field checks on the supplier. Such as name, postcode, bank account numbers, company name, VAT number checks. Ask Once received these need to be crossed checked on the existing supplier file for a duplicate.
4. Inspection – carry out a monthly or quarterly inspection of the whole supplier file to look for errors and potential duplicate suppliers. Delete duplicates and correct mistakes where appropriate.
5. Procedures - establish a written procedure manual to cover every aspect of master supplier file maintenance.  This should be easy to access across the organisation and be jargon-free
6. Software - use a bolt on software solution which will work with all ERP systems such as Duplicate Supplier Finder™ from FISCAL Technologies.  Using proven proprietary algorithms and sophisticated pattern matching techniques, the software will generate a report of potential duplicate suppliers for you to correct.  Such solutions are designed specifically for use in Finance and are quick and easy to use, with the ability to run reports as necessary.

With the combination of implementing these six ways to clean and maintain your existing master supplier file, your Department will be going a long way towards producing an error free, efficient system. This will result in a compliance friendly accounting structure, the prevention of loss producing duplicates and you’ll be adding true value to your organisation’s profits.  In times like these, surely that’s the kind of news your Finance Director will want to listen to..!

For your free Fact Sheet on Duplicate Supplier Finder™ please click here

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