What is the Vendor Master File?

The vendor master file is the repository of a considerable amount of information about a company's suppliers, which are used for the payment of supplier invoices and the issuance of purchase orders. It includes data about the history of purchases from a supplier, as well as the procurement categories in which the buyer is acquiring goods and services from the supplier, its payment terms, delivery record, and so forth.

Best Practices for Cleaning the Vendor Master File

When a business has even a relatively small number of suppliers, a significant number of errors will gradually creep into the vendor master file. Here are a number of suggested ways to clean the file:

On a regular basis, print a report for each supplier that shows every field being used in the vendor master file. Scan the report for missing information in the more important fields, such as tax codes and taxpayer identification numbers (TINs). If the supplier is actively being used, then contact the supplier to obtain the missing information.
Print a list of suppliers, sorted by name, and look for duplicate names that indicate the presence of duplicate records. Determine which of these records to archive and flag them as not to be used again.
Print a report that shows payments to suppliers over the past two years. If there has been no activity during that time period, flag the related vendor master files as archived.
Compare the recorded taxpayer identification numbers for the newest suppliers to the TIN matching program on the IRS website to verify that the recorded numbers are correct. Update any information that is incorrect.