A company with even a modest number of suppliers will gradually build up a considerable number of errors in its vendor master file. Here is how to clean up the file:
- Each quarter, print a report listing, for each active supplier, every field in the vendor master file. Use the accounting software's report writer to avoid printing any fields not currently in use. Once printed, any empty fields will be easily observeable. In particular, look for missing taxpayer identification numbers and tax codes.
- Print several variations on a duplicate names report in order to spot duplicate vendor records. One version is sorted by supplier name, another by supplier address, and yet another by taxpayer identification number (TIN). Once a duplication is spotted, figure out which one is not being used, and flag it as archived.
- Speaking of archiving, run a report listing all suppliers with whom the company has done no business in the past year (or two years, depending on company policy). Flag them as archived in order to remove them from the current vendor master file.
- Print a report listing all suppliers added to the file since the last review date. Then go to the www.irs.gov web site and click on its link to sign up for e-services. This allows you to access the IRS' TIN verification program on-line. Then use the IRS site to verify the TIN of all the new suppliers. Contact vendors if their TINs are incorrect, and update the vendor master file with this information.