Vendor Record


In accounts payable automation or vendor management system, a vendor record stores all the information about a vendor that a business will need to track and manage. A vendor—also known as a supplier or seller—is an enterprise that contributes goods or services in any supply chain.

A vendor record typically contains information pertinent to the procurement cycle, specifically for accounts payable or accounts receivable. Vendor records will often detail information like:

  • Contact information – including the vendor address and any points of contact in the vendor relationship.
  • Bank information – includes payment defaults like bank accounts, credit limits, payment methods, and the account to pay from.
  • EFT accounts – the bank account information associated with this vendor for Electronic Fund Transfers (EFT).
  • Tax ID number – a Taxpayer Identification Number (TIN) is an identifying number used for tax purposes in the U.S.
  • 1099 information – contains the 1099 invoice amount and a year to date total not included on invoices.
  • Recent activity – any recent usage of the record, including credit memos or invoices.
  • Purchase orders –  any POs associated with the vendor, including the order date, the PO number, type, and status.
  • Notes and actions – any additional comments or upcoming actions you want associated with the vendor
  • Custom fields – most vendor management systems have the ability to add custom fields as needed as well.

Vendor records can also be setup to alert of actions including a new invoice, credit memo, and vendor holds (or removal of holds). Vendor records can also be archived or reactivated, and the history of such actions should be noted in the vendor management system.

In the procure-to-pay cycle, once a purchase requisition is made, a vendor or supplier to meet the needs outlined must be found. After the proper research is completed and a vendor is selected, said vendor will be entered into the system as a vendor record. This will allow for the procurement cycle to continue, and consequent purchase orders can be opened and goods and/or services can be acquired. Once the goods or services are received, delivery receipts, invoices, and other documentation can be associated with the vendor for PO matching and eventual payment release.

Best Practices

When entering vendor records, there are best practices to follow that will ensure a clean vendor master, avoid duplicate vendor records, ease vendor maintenance in the long run, and—most importantly—ensure timely payment to your vendors. These best practices include:

  • Entering a complete and accurate address for every vendor
  • Entering an account number for every vendor (if applicable)
  • With vendors who have several accounts, create one vendor record with each and append the vendor name with some differentiating label or account number
  • Include the invoice number on the payment to ensure proper matching to the PO and invoice
  • When using ePayments to independent contractors or employees, include their name in the account number field

In addition, when choosing a vendor to work with your business—potentially as a long-term relationship—consider the each vendors’:

  • Reputation, track record, and level of proven integrity
  • Management attitude, compatibility, and trust
  • Communication openness
  • International quality certifications


Source: Vendor Management Workflow (FAO blog)

Source: Create Vendor Master Best Practices (SAP)

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