A vendor master is a collection of all vendor records in one place, typically in the Accounts Payable or ERP system. An accurate and up-to-date vendor master is an essential function of the accounts payable process that sometimes does not get the required attention.
The vendor master plays an important role in providing a solid foundation for the accounts payable process and helping the finance team reduce financial risk.
“A well established vendor management procedure can help significantly reduce risk,” said Anne Wheeler, Consultant, CS Process Flows, LLC
Some steps to help mitigate risk include:
- Allowing only one record per vendor/TIN;
- Entering all details; used or not;
- Establishing maintenance protocols;
- Enabling additions and edits based on approved submissions;
- Confirming the legality to pay the vendor, especially international partners; and
- Obtaining new forms to re-activate a vendor to confirm the details that are already in the system.
Limiting vendor master role access to the vendor team is another way to reduce risk, Wheeler noted. “This role should not have the ability to process invoices or payments.”
Want to learn more about creating and maintain a vendor master and how it can help reduce risk and streamline processes for managing and maintaining vendor records? Click here to watch the webinar The Vendor Master — A Solid Foundation for Accounts Payable Processing.