Who What and Where Final v3

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by:

MANAGING YOUR VENDOR DATABASEWHO, WHAT AND WHERE


Tammie Norman serves as the Director of Transactional Accounting for ICF International. ICFI provides professional services and technology solutions to both Government and Private clients from more than 70 offices around the world. With more than 5,000 employees and over a Billion dollars in revenue annually. Prior to joining ICFI Tammie was the Director of Accounts Payable for Discovery Communications.

In her career, Tammie has completed three SAP full P2P implementations and three payroll implementations, including time and attendance in both Union and Non-Union environments. Her departments have paid vendors and employees in more than 40 different countries. She has gone from payroll and accounts payable to Shared Services, from purchasing and sourcing to P2P, from front/back office treasury functions to IDOC transmissions, and from paper to paperless.

Outside of her professional life Tammie is a Board Member of the Prince George’s County League of Women Voters and was recognized by The National Association of Professional Women as one of their “Women of the year for 2013/2014”.


Managing the Vendor Data BaseIn today’s fast business environment, it can be an overwhelming task to keep up with all the changes, controls and regulations that are required to maintain a current and accurate Vendor Master File. Not maintaining this information can lead to duplicate payment, fraud, compliance failure and IRS penalties and fines.

Inaccurate data can manifest itself throughout the organization


Typical State• Large, Outdated

VMF• Few Controls• Low Automation• High Risk of Fraud,

Lost Profits

Sanitize• Duplicates Removed• Relationships

Identified• Validation Points• Aged Vendors Purged

Stabilize• Naming Conventions• Workflows• Complete Profiles• Segregation of Duties• Centralization• Reporting• Transparency

Optimize • On-Boarding• Fraud Protection• Supplier Self-

Service• Data Collection• Data Validation• Roles &

Permissions• GRC Controls• Integrated

Workflow• 3rd Party Validation• Enterprise

Collaboration

Reactive Tactical Strategic


Who your company does business with plays a critical role in not just the Accounts Payable group, but many other areas.

“WHO, WHAT AND WHERE”


Why Vendor Files Grow• Purchasing and AP can use Different File and or Multiple Systems

• Data Quality and Consistency

• Missing Information

• Non-standard

• Invalid

• Name Entered Differently by your Staff

• Vendor Changes Name

• Street Address and /or Lockbox changes

• Mergers and Acquisitions

• Divestitures

• Data/business/regulations change over time


Cost of Bad Data• Inefficient and ineffective processing

– Lost/re-work– Late payments – credit scores, missed discounts, emergency payments– Increased inquiry calls to AP– Credit holds against Purchasing

• Check payments– Stops, voids, reissues, escheatment– Payments made to wrong vendor, sent to wrong address– About half of all U.S. companies reissue 1% of checks, >25% reissue more

• Duplicate/Erroneous payments• Purchasing

– Non-consolidated spend– Maverick/off contract spend

• Lacking visibility into negotiating levers


Collection and Maintenance Vendor Information is Useful in Many Areas• Reduction of duplicate payments

• Reduction the potential for fraud

• Reduction outstanding checks

• Reduce or eliminate potential IRS penalties

• Knowledge on how much you are spending and where

• Help to ensure proper and timely tax filing and report

• Save money by purchasing, processing and paying smart

• Enhanced supplier engagement and communication


What Constitutes Setting Up a New Vendor?

A new or different Tax Id Number• Federal Express may have many locations but one Federal ID

• Jones Cleaning Services was recently purchased by Clean House Services

• They still use the old name but will be reporting under a New Federal Tax Number

Not a new address or bank account• Link various location to the parent company; roll up payments to the parent

• If your system allows for multiple remittance, use them

• Verizon Communications has one Federal ID but depending where the services are being provide Payment can be direct to several different bank account or processing center


What’s in a Name? - Data Standards• One Man Plumbing, 1 Man Plumbing• Use clear and consistent vendor naming convention• It is best not to use punctuation• Have a list of common used abbreviations• Determine the use of upper and lower cases• Don’t use personal titles• Have a policy for ‘AND’ and ‘&’


Compliance InformationCollection of W-8 and W-9• W-8’s have a 3 year expiration• Is the Foreign vendor subject to treaty agreementsTax ID verification/Country Registration Numbers• Avoid “B” Notices - do TIN checking• OFAC check• Check with the Secretary of State

o Each company is required to register their business with their state of incorporation

Business Database Check• Equifax• Dun & Bradstreet• Insurance or License Certification• Minority Business Certification


Payment Strategies at Vendors Set Up

• Set standard terms, this can help with planning and monitoring cash flow.

• NO MORE CHECKS - offer check payments as a last result.

• EFT payment are quicker and safer.

• All international payment should be sent as Fed Wire Only

• If they will take a credit card pay by credit card

• Always ask the question, you would be surprised how much you company can save just by taking advantage of early pay discount.


Additional Information Create Vendor Groups

• This will allow your internal customers to search for existing vendors that you have done business with before. This can help minimize the vendors you have providing the same services and potential negotiate discounts.

Are the services of products subject to Sales/Use tax, if so, what state• Sales and Use tax rule can vary from state to state depending on

what goods and services are being provided.

What are the Payment Terms

Set standard terms, this can help with planning and monitoring cash flow.


Vendor Master CleanseStrategic Data Control Statement

• What are the acceptable sources of Data?

• What are the desired types of Data?

• How will you validate the data?

• Create a data guideline


The Process – Define the Roles• Owner should be responsible for:

• Defining data requirements• Setting, maintaining and monitoring standards• Coordinating the activities• Well-Documented and Tested Procedures

• Segregation of Duties Controls

• Audit Trail of Changes

• Reconcile and Synchronize


So how do we keep up with all the requirements and collecting all the data that we need?

Move to a VENDOR PORTAL


Benefits of Having a Vendor Portal• Electric and storage of Vendor information

• Automation of checking tax numbers

• Ease of communication with your vendors

• Easy access to information and reporting

• Electric tracking of expiration dates for W-8 and license and insurance

• Collection of banking information and validation of routing numbers

• Document solicitation for diversity

• Ability to provide invoice and payments status to vendors


What is a Vendor Portal?

Best Practice: The 3-Step DeploymentEstablish your internal supplier communication controls and needs• Data collection• Document management• Segregation of duties

Integrate workflow for data validation• Internal approval workflow• Third parties to validate data

Enable E commerce• Invoicing and discounting


What It Does• Analyze current cost structure

by department

• Identify targeted areas for improvement

• Establish level of investment against level of savings: Create ROI model

What We’ve Learned• Wide Open Opportunity

• Supplier Management Costs Hundreds of Thousands of Dollars

• Estimates ALWAYS exceed expectations

• Much Departmental Overlap

The Need for Cost Calculators


The final question is …NOT how we pay for the cost of having a Vendor Portal?BUT how much it will cost your company for not having a

Vendor Portal?• “B” notice fines and penalties

• Up to 30% fines for FACTA incorrect reporting of non-reporting

• OFCA violations

• Time spent on vendor calls

• Lost Early pay discounts

• Loss of Pcard rebates

Documents

Who What and Where Final v3