The Vendor Master File is crucial for any Accounts Payable (AP) department, serving as the ultimate source of truth. However, it's known that around 20% - 25% of data in these files is anomalous. With incorrect data prevalent, how can your AP team act confidently? How can your organization process supplier payments reliably if the Vendor Master File isn't accurate and up-to-date?
Eftsure will explore what it takes to achieve and maintain fraud prevention in this 3-part series:
This section covers assessing the current state of your Vendor Master File and establishing best practices for data structuring.
This section explains how to clean existing data in your Vendor Master File following the rules established in Part 1.
This section focuses on maintaining your Vendor Master File, especially when adding new suppliers or updating existing ones.
2. Establish Naming Conventions – Organisations
The organisation name is a critical data point within your Vendor Master File. Consistent entry of organisation names by AP members is essential to avoid duplicate payments and reduce fraud risk. The Australian Government style guide can serve as a template for entering organisation names.
Follow the supplier's naming style, as organisation names can change. Confirm names via their website, annual report, or letterhead. If unsuccessful, use reliable services like:
4. Establish Vendor Master Data Field Standards
Depending on your system, you may set rules to restrict data entry, ensuring consistency. For example, limit character types or set fields as dropdown menus. These rules are useful for fields like phone numbers, BSBs, Account Numbers, or government registration numbers. By preventing staff from entering hyphens or spaces, you ensure greater consistency.
5. Banking Records Accuracy
Accurate supplier banking records in your Vendor Master File are crucial to prevent incorrect payments and fraud. These records are vulnerable to manipulation for financial gain. Implement continuous controls monitoring to verify records in real-time before processing a payment.
Integrating Eftsure into your accounting processes provides visibility into whether other organisations have used the same banking records to pay the same supplier. This saves your AP team time and provides greater assurance than manual spot-checks.
6. Define Inactive Suppliers
A key objective in cleaning your Vendor Master File is identifying inactive suppliers. Decide whether to delete these suppliers or mark them as inactive, ensuring no new invoices are assigned to them. Typically, exclude suppliers with no activity in the last 12-18 months, except those added in the last 90-180 days. Also exclude records identified as employees, already marked for purge, one-time suppliers, or created from automated feeds.
| Address Convention | Standards |
| Building Name | Full name identifying the building, ideally in uppercase or with an initial capital. Leave one or two spaces between components. |
| Building / Complex Sub-Unit | Identifiable portion within a building, ideally in uppercase or with an initial capital. Use a forward slash (/) to separate an apartment, flat, or unit number from a thoroughfare number. |
| Floor / Level | Descriptors for the floor or level of a building, ideally in uppercase or with an initial capital. Avoid using a forward slash (/) to separate a floor or level number from a thoroughfare number. |
| House / Property Number | Numeric/alpha reference number of a house or property, positioned before the Street Name and Type. Include applicable numbers separated by a hyphen (-) with no spaces. |
| Lot / Section Number | Positioned before the Street Name and Type, ideally in uppercase or with an initial capital. |
| Street Name and Type | Full street name with thoroughfare type, ideally in uppercase or with an initial capital. Spell out the street name in full, with exceptions for common prefixes. |
| Postal Delivery Type | Identifies a specific postal address, ideally in uppercase or with an initial capital. Avoid punctuation. |
| Place Name / Suburb / Locality | Full name of the place or Post Office of delivery, printed in uppercase with no punctuation. Generally not abbreviated. |
| State / Territory | Defined State or Territory in Australia, printed in uppercase with no punctuation. |
| Postcode | Four-digit numeric descriptor for a postal delivery area, all numeric with leading zeros displayed. |
Vendor Master File Management Services: How Can Eftsure Help?
The Vendor Master File is a critical system that cannot be neglected. Incorrect data risks incorrect payments and fraud. Ongoing data hygiene is essential but can be time-consuming. Eftsure's Vendor Master File Health Check service is the initial step for organisations integrating our platform. We cleanse your Vendor Master File data, especially verifying supplier banking records, saving your team time and ensuring data accuracy.
Master Vendor File Pre-Clean-Up
Before cleaning your Vendor Master File, assess what needs cleaning and establish rules for maintaining data. Suppliers often remain in the file indefinitely, resulting in many "inactive" suppliers. While not necessarily a problem, redundant data can be burdensome. Inactive suppliers may become active again, leading to duplicate entries and potential duplicate payments.
Deactivate supplier accounts inactive for over 12 months, retaining prior transaction records but preventing new records. This mitigates the risk of duplicate payments and internal fraud.
How Often Should I Clean My Vendor Master File?
Data hygiene should be continuous, integral to the Procure-to-Pay process. However, AP staff are busy, and data hygiene standards often slip. Maintaining Vendor Master File integrity requires ongoing effort. Set-and-forget is not viable as suppliers are added, removed, and updated continuously. Verify supplier details during onboarding, but hackers or insiders may manipulate data later.
Events triggering a thorough clean-up include adopting a new ERP or accounting system, mergers, acquisitions, or hiring a new CFO or AP manager. These are opportunities for a deep-clean and adopting best practices.
Vendor Master File Management Best Practices
Establishing clear rules for Vendor Master File data is critical. Procedures should be integrated into your broader AP policy, formally written with guidelines, and training provided to all staff. Consistent data handling is essential for maintaining integrity and limiting fraud or error risks.
1. Establish Address Conventions
Best practices require clear conventions for entering supplier addresses, even with electronic communications. Register the Australian headquarters for suppliers with multiple locations, even if your contact is elsewhere.
3. Establish Naming Conventions – Individuals
Include the legal name of the primary contact at a supplier in your Vendor Master File. While not as critical as the organisation name, common standards are important.
Vendor Master File Template
Use the standards set by Australia Post to set address standards. Their address naming conventions make a useful template guide.
Address Conventions
| Organisation Convention | Standards |
| Names all in lower case | When the organisation name is in all lower case, use an initial capital. For example, use "Eftsure" rather than "eftsure". |
| Medial capital letters | Some names start with a lower case letter but have a medial capital (e.g., "eBay"). Write the name the same way, even at the beginning of a sentence. |
| Punctuation and logograms | Pay attention to capital letters, punctuation, and logograms. Ensure all words in the name are included without adding extra words. |
| Names all in upper case | Some organisation names are in all capitals. Write the name in all capitals as the organisation does. |
| Shortened names | Use the organisation's shortened form if regularly used. Don't use full stops between letters in an abbreviated name. |
| Company designations | Use shortened forms like "Ltd" or "Pty Ltd" as part of the legal name without a comma between the name and designation. |
| Apostrophe | Use an apostrophe only when it forms part of the official name. |
| The | Use "The" only when the supplier uses it in their official name. |
| Primary Contact Convention | Standards |
| Person Title | Positioned before the Given Name, ideally in uppercase. Accepted abbreviations include Doctor: DR, Honourable: HON, Mister: Mr, Misses/Miss: Ms, Reverend: Rev. |
| Given Name | Legal name, ideally in uppercase. Full stops can separate initials. Mixing a given name in full with initials is acceptable. |
| Family Name | Family name, ideally in uppercase. Dual family names should be hyphenated. |
Organisation Conventions
Primary Contact Conventions
For a full demonstration of Eftsure’s Vendor Master File Health Check and how it can help protect your organisation, contact us today.
