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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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3–51. Clean Up the Supplier Master File

A company with even a modest number of suppliers will gradually build up a considerable number of errors in its vendor master file, which can result in several problems. First, a supplier with a missing tax identification number could be a problem when annual 1099 forms are delivered. Also, if a supplier has multiple records in the database, the same invoice may be entered against each supplier name, resulting in multiple payments of the same invoice. Here is how to clean up the file:

1.
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 observable. In particular, look for missing taxpayer identification numbers and tax codes.
2.
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.
3.
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.
4.
Print a report listing all suppliers added to the file since the last review date. Then ...

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