How To Prevent Duplicate Vendors in the Vendor Setup Process

• Require a Business Process of One Tax ID Per Vendor Record – No Duplicate Tax IDs

  • This may be a setting in your Accounting System or ERP that you or IT needs to update

  • Ensures a hard error if a vendor with the same Tax ID is being set up

  • Have SAP? You can still review the records to confirm that the address or banking (reasons for setting up duplicate vendors with the same Tax ID in SAP) does not match

• Document Vendor Naming Convention and require it to be followed by all who set up vendors. See below for recommendations from my 3 Step Vendor Setup and Maintenance Process eGuide.

  • Take into consideration how vendors are searched and the return results from your Accounting System/ERP

  • Publish it to internal team members so they are aware how to search for vendors in your vendor master file.

• Prior to setting up a vendor, have the Vendor Maintenance team member search your vendor master to confirm the vendor is not already setup

  • Search by Legal Name use a wildcard if possible

  • Search by Address

  • Search by Tax ID

 If you have multiple Accounting Systems/ERPs  - search each.  You may need to add the vendor to the vendor master file where it does not exist anyway, but this is a great time to determine if that vendor data needs to be updated in other vendor master files. 
Eliminate Existing Duplicate Vendors in Your Vendor Master File

• Implement regular reviews of your Vendor Master File

  • Inactivate vendor records without a purchase order, invoice, or payment activity in 13, 15, 18 months, or whatever months is right for your company and industry.

  • This reduces your vendor master file to make it easier to spot duplicate vendors.

• Found a Duplicate Vendor?

  • Review to validate if the multiple vendor records are true duplicates. Verify Tax ID, Legal Name vs DBA, address, etc.

  • If it is determined that the vendor records are a duplicate, inactivate all but one vendor record. There may be research that needs to be done to carefully determine which record will survive. Open activities such as unpaid invoices or open purchase orders will need to be considered.

Final Thought - Automation Can Help

Implement a Vendor Self-Registration Portal.  The vendor will maintain its own vendor record, removing vendor-sensitive information from internal team members that only need to pass that information to Accounts Payable anyway.  With vendors maintaining their own vendor registration, there is less potential that a new vendor will be set up when changes are requested.   Not all portals are alike, make sure you find one that has a duplicate vendor validation.