Recovering profits is an industry that never goes out of style. As Accounts Payable (A/P) recovery experts, we know that there will always be a call for what we do. Why? Because A/P people are human and, humans make mistakes. However, there is a hot, new position open now in our industry that requires no experience on your part: Vendor Scrub Specialist.
A Vendor Scrub Specialist focuses on the A/P housekeeping task that you don’t have time to do, but know must be done. We have talked about why you should scrub your vendor list before (#MyIndustry). We also understand that is a daunting task to organize your vendors. And never mind keeping track of the amount of business you’re doing with each of them or where they are.
Despite the mundane nature of the task, managing the vendor file is important, maybe today more than in the past. Mergers, acquisitions, divestitures and name changes happen now at accelerated rates. Who knows how many vendors in your files now are even active businesses at this point?
The business environment we operate in today makes the need to manage your vendor file clear. There exists, however, a distinct lack of clarity as to why this position of a Vendor Scrub Specialist should be a priority. It’s quite simple: Managing your vendor file will have a direct effect on the profitability of your bottom line.
The Benefits of the Vendor Scrub Specialist
We realize this is an extraordinary claim for an activity you likely consider a mundane clerical task but hear us out on this concept. There are four critical areas where a vendor file management can affect your bottom line profitability, mainly through reductions, including:
- Reduction of the potential for fraud: Fewer contacts of dubious origins means fewer chances you pay an invoice or give out information to the “wrong” supplier.
- Reduction of duplicate payments: When you know your list is accurate, you rest assured that the invoice coming from them is correct—and one-of-a-kind!
- Reduction of unfamiliarity: Once you consolidate duplicate vendors into one (or fewer) records, you can see how much you spend with them, too.
- Reduction of expenses: Knowing how much you spend, you can now renegotiate purchasing discounts, implement more efficient processing of invoices and paying smarter for your benefit.
When you see the benefits of employing someone to manage the vendor file, you can also see that the implications of NOT managing the vendor file can be significant.
Recruiting the Vendor Scrub Specialist
Managing your vendor file is a team effort. The team that reports to the new position needs knowledge and expertise in your industry and your systems, as well as general expertise in purchasing and A/P. At a minimum, your A/P purchasing and information technology organizations should be involved.
Some of the expertise you’ll need may require the use of external resources. When you first begin to manage your vendor file, bring in outsiders to augment your internal staff to ensure that the resulting team has the full complement of skills and resources needed to achieve the desired goals.
Make Vendor Management a Process
Many firms cut corners on the vendor management—or skip some activities altogether— to reduce time and money spent. Some lose sight of the goals and benefits. Others may treat the process as a one-shot project. These firms are also disappointed with the results.
To get the best benefit from the new position and the reduction of fraud potential, of duplicate payments, of unfamiliarity with costs and of potential for lost profits, you must make vendor management a process.
When it comes to flashy, thought-provoking careers, we know the idea of a Vendor Scrub Specialist responsible for managing your supplier file doesn’t necessarily come to mind. Goodness knows that the activity surrounding organization of files and eliminating duplicate vendors isn’t exactly trending.
However, trending or not, there are numerous benefits to managing your vendor file. If you continue to ignore what might be considered Accounts Payable housekeeping you are missing out on all of them.
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Dawson Caldwell is the President and CEO at AP Recovery, the undisputed leader in off-site recovery audits and prevention technologies for disbursement management. Since founding the company in 1994, Dawson put his extensive experience in audit workflow and process management to work on behalf of AP Recovery clients. He admits that nothing excites him more in business than clients with a data-related problem his team can solve for them.
More articles by Dawson.