How to Prevent or Eliminate Duplicate Vendors in Your Vendor Master File

How to Prevent or Eliminate Duplicate Vendors in Your Vendor Master File.jpg

Threats from cybercriminals phishing scams such as Business Email Compromise (BEC) have definitely put Accounts Payable (AP) Vendor Maintenance teams on high alert. Even in the midst of these external threats, let’s not forget about internal threats, that includes setting up duplicate vendors. Duplicate vendors in the Vendor Master File can result in duplicate payments and be an indicator of fraudulent vendors existing in your vendor master file.

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 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 truly 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 activity such as unpaid invoices or open purchase orders will need to be considered.

Automation Can Help

Implement a Vendor Self-Registration Portal.  The vendor will maintain the 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 setup when changes are requested.   Not all portals are alike, make sure you find one that has a duplicate vendor validation.  If you need help with a business case see my blog Need Help with ROI for a Vendor Portal?

Vendor Portal not in reach yet or you still need to clean up your Vendor Master File?  How about Robotics Process Automation (RPA)?  With RPA you can schedule run reports to be run monthly, quarterly or annually that fit the criteria for inactivating vendors and that identify duplicate vendors (legal name, tax id or address match) and email them to a team member to review.  If you are an SMB, check out my blog SMBs – Think Robotics Process Automation (RPA) is Out of Reach? Think Again!  It also includes a podcast interview with Wilton White of Diversified Robotics where he talks about how he helps his clients implement RPA one step at a time. 

 How to do you deal with duplicate vendors?

 Other Resources

Protect the Vendor Master File from Fraud.  Keep it Clean. 

Debra R Richardson


Debra is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors and Aramark.

For the past eight years, Debra has focused on Global Vendor Maintenance, and implemented a vendor self-registration portal for 140k+ global vendors across five Accounting Systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file.