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Managing your master vendor file: Everything you need to know

Nov 2023

4 min read

What is master vendor management?

Master vendor management is the practise of maintaining an accurate master vendor file so your business can have efficiency in their Procure-to-Pay processes and transparency in their vendor data. Good management of your master vendor file ensures your data is accurate, avoiding things like duplicate vendors, inactive vendors and fraudulent vendors. 

This process is key for organisations with lots of vendors. If the data isn't clean, it can cause a huge headache for your Accounts Payable and Procurement teams. 

Maintaining your master vendor file might sound like a heavily manual and time-consuming task, particularly if your company has an appetite for acquisition, but it doesn't need to be. Automating your master vendor management is a smart way to stay on top of changes, reduce risk and be alerted to any unusual activity. 

Energy Transfer is one of North America’s largest midstream energy companies. In the last five years, the energy giant has acquired eleven new businesses, so as you can imagine, master vendor data management became quite the task for their Accounts Payable team. Jeff Santos, Accounts Payable Analyst at Energy Transfer shares how Xelix’s automated solution for master vendor cleansing has helped the team gain back control over their ever-growing vendor database.

 

 

What is a master vendor file?

A master vendor file, also known as a vendor master file, is a centralised database that contains essential information about all the vendors or suppliers that a company works with. Your master vendor file is a single source of truth for vendor data, including vendor names, contact information, payment terms, bank account details and more.

By maintaining a clean master vendor file, companies can effectively manage their relationships with vendors, monitor performance and facilitate effective communication. It also improves decision-making and negotiation processes for Procurement teams.

 

Why is master data management important?

Master vendor data management is key to ensuring your business gets a consolidated view of up-to-date and accurate information for all your suppliers. 

Working with a poorly managed master vendor file can put your company at risk of fraud, duplicate vendors and payments, and incorrect payments. By maintaining data integrity and performing regular audits, businesses can mitigate financial risks and protect themselves from costly overpayment errors, fraud and time wasted navigating inactive or incorrect data.

How to clean your master vendor file

Remove duplicates and archive inactive vendors

When you have duplicate vendors, you're likely to make duplicate payments (obviously!). Particularly when you operate multiple business units.

By regularly checking and updating your master vendor file, you can remove any new duplicate vendors that may arise. It’s also best practice to archive or remove any vendors that have been inactive for more than twelve months, enabling more efficient and streamlined management of your master vendor data. You can take this process to the next level with automation and get alerted to duplicates or inactive vendors, rather than spot checking and tackling manually when you remember. 

Obtain missing information

It may seem obvious but making sure your data is complete and accurate in your master vendor file will keep your data integrity top-class. For example, no missing addresses, phone numbers or tax codes. This shift from a reactive to proactive approach to your master vendor files will save you the headaches in the long-run. Automating alerts when there is missing information will prevent issues such as late payments and by keeping your master file clean, you'll keep your Procurement team happy!

Standardise data entry

Keeping consistency when creating new vendors will guarantee all required information is in your master vendor file from the outset. Sharing a standard form with every supplier is a good way of getting all the data you need without the need for manual data entry. With Xelix, your master vendor file is scanned every day to identify any missing information or changes, so you'll know if a vendor record has gone amiss when created.

 

Automate your master vendor data management with Xelix

In today's world of digitisation, the master vendor file can be further enhanced through AP (Accounts Payable) automation and vendor self-registration portals. These technologies can simplify the vendor onboarding process, reduce manual data entry and expedite the approval and setup of new vendors.

With Xelix's easy-to-use tool for managing master vendor data, you can move from a reactive to a proactive process. Vendor master data doesn’t have to be a headache, it can be an automated control for your business.

“During COVID, our team were adding new vendors every day. Xelix’s Vendors module has helped us go back and clean up our Master Vendor File and be more disciplined going forwards”,

- Director and Business Process Owner for AP/T&E at Moderna.

If you would like to see all that in action, please get in touch for us to book a personalised demo with with you. 

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