Serving as a critical gateway between your company and your vast vendor population, the vendor master file is the most important resource you have in your Procure-to-Pay environment. Balanced perfectly between sourcing, procurement, finance, AP, tax, legal and more the master vendor file has proven itself, over time, as a valuable asset that can be leveraged to save money, save time and accomplish more of your corporate goals including fraud prevention and ensuring regulatory compliance. 20 year veteran of an industry leading F200 shared service environment, Josh Morrison will walk you through the true value of your vendor master file and how your company can more effectively leverage your vendor data. In this 45 minute presentation you will learn: • What are the real costs of poor supplier data • What critical benefits you need to start pulling from your vendor file • How your vendor file can be a shield against risk • The three steps you need to take to achieve excellence in your supplier data

1. CONFIDENTIAL 2015
Secrets You Need to Know
About Your
Vendor Master File
March 26, 2015
LIVE WEBINAR
Speakers:
Joe Flynn, Lavante Inc.
Josh Morrison,Lavante Inc.

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Panelists
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3. 3
How to Earn Your CPE Credits
1. Must participate in all polling questions.
2. Attend the webinar for 50 minutes or more.

4. Introductions – The Panelists
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Josh Morrison, Sr. Consultant, Lavante
• Former F200 AP & Strategic Sourcing Senior Manager
• Extensive background in Procure-to-Pay & Supply Chain Relationships
• Expertise in Audit Controls, Compliance & Enterprise Systems
• Leading Process Improvement and Business Strategy Thought Leader
Josh.morrison@lavante.com
http://www.linkedin.com/in/joshmorrison
Joe Flynn, Founder & CSO, Lavante
• Former Director of Operations with Howard Shultz & Associates
• Recognized Industry-Leading AP & Procure-to-Pay Expert
• Pioneer of Industry’s Only Patented Automated Recovery Solution
• Father of 4 Wonderful Daughters
joe.flynn@lavante.com
http://www.linkedin.com/in/jflynn10

5. Agenda
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Secrets You Need to Know About Your Vendor Master File
• Criticality and Impact of the VMF
• Challenges in Managing the VMF
• Define Your Internal Risk Tolerance
• Three Pillars to a Best-In-Class VMF
• The Power of the VMF
• Summary
• Benefits of Thought Leadership

6. Why is a Sanitary, Healthy VMF so Critical
VMF is Center of all P2P Decisions
- Cornerstone of every P2P transaction
- Facilitates accurate withholding & reporting
- Aids in government & regulatory compliance
- Data framework for completeness & accuracy
- Serves as base for Key Performance
Indicators
- Supports adherence to contract terms &
corporate policies
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7. The VMF Impacts on Enterprise Decisions
Decision Support Scenarios
Scenario 1
Purchasing needs to have accurate expiry
information to manage supplier contracts for Legal
Scenario 2
Strategic Sourcing needs to analyze supplier
spend and usage data to reduce costs for HR
benefits
Scenario 3
Executive Mgt. needs to report diversity and
charitable contributions to support Compliance and
Tax as well as Sales initiatives with Customers
Scenario 4
Operations needs to find a new service provider
for security services to protect their Employees
and engages AP or Purchasing
Many Others….
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Impacted Areas

8. Why Errors Occur – The Human Element
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Effect
- Errors
- Fraud
- Duplications
- Regulatory Infractions
- Overpayments
Cause
- Human Error
- Multiple Owners
- Decentralization
- Conversions
- Uploads

9. Barriers to an Optimized VMF
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- Lack of Controls
- Inadequate Segregation of Duties
- Inconsistent Information Collection
- Missing Validation Protocols
- Excluded Payee Identification
- Poor Internal Communication
- Multiple Departments
- Data Decays
- Record Duplication
- Inaccurate Spend Analytics
- Supplier Bankruptcies
- Obscure Related Suppliers
- Insufficient Resources
- Change Management
- New Govt. Rule Changes

10. Define your Internal Risk Tolerance
Plan your Strategic Controls
-Government Validations
-Internal Process Verification
-Third Party Credentialing
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11. Government Validations
Create a Government Compliance Program
•Assess
– Ongoing screening
– Entire supplier list
•Monitor
– Continuous monitoring
– Notification & response
•Document
– Maintain up-to-date exclusion list
– History and notes tracking
•Report
– Report identified exclusions immediately
– Update supplier master file accordingly
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12. Internal Process Verification
Develop Internal Controls & Governance Program
-Standard Operating Procedures
-Sarbanes-Oxley Reporting
-Change Management & Workflows
-Segregation of Duties
-KPI’s & Strategic Initiatives
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13. Third Party Credentialing
Utilize Outside Resources for Data Verification
-U.S. TIN & E.U. VAT Match
-USPS Address
-Bank Routing & Account
-Exclusion List Identification
– OFAC, OIG, SAM, FATCA
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14. The Best-In-Class VMF
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• Duplicates
• Missing Data
Points
• Inactive
Accounts
• Inter-
relationships
SYSTEMS, GOVERNANCE, TRANSACTIONS, ANALYTICS, PEOPLE
BEST-IN-CLASS VENDOR MASTER FILE PROCESS
SANITIZE
• Naming
Conventions
• Segregation
of Duties
• Add/Change
Workflows
• Profile
Completion
STABILIZE
• Regulatory
Compliance
• Validation at
On-Boarding
• Fraud
Protection
• Supplier Self-
Service
OPTIMIZE
The Three Pillars

15. Typical State
• Large, Outdated VMF
• Few Controls
• Low Automation
• High Risk of Fraud,
Lost Profits
Sanitize
• Duplicates Removed
• Relationships Identified
• Validation Points
• Aged Vendors Purged
Stabilize
• Naming Conventions
• Workflows
• Complete Profiles
• Segregation of Duties
• Centralization
• Reporting
• Transparency
Optimize
•On-Boarding
•Fraud Protection
•Supplier Self-Service
•Data Collection
•Data Validation
•Roles & Permissions
•GRC Controls
•Integrated Workflow
•3rd Party Validation
•Enterprise
Collaboration
Vendor File Process Maturity Model
Reactive Tactical Strategic
Define Measure Analyze Improve Control
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16. Lavante Tools for VMF Situational Assessment
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LowLevelofControls&AutomationHigh
Smaller VMF Size Larger
< < < STABILIZE > > >
< < < SANITIZE > > >
< < < OPTIMIZE > > >
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3
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Scenarios
Low Number of Suppliers – Minimal
Controls and automation
-- Need to Sanitize
Modest number of Suppliers –
Modest Controls and Automation
-- Need to Stabilize
Many Suppliers – Modest Controls
-- Need to Stabilize and add
automation to allow for Optimization
This is Who you want to be
-- Need to add workflow and stay
flexible for regulatory change
Now Consider:
When was the last VMF Cleanse
Project ???
7% of VMF has changes annually
-- Jon Casher
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2
3
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Needs Assessment Analysis

17. Sanitize
• Cleansing Data
– Identify Related Suppliers Reduce Duplicate Payments
o (~30% of duplicate payments are result of dirty vendor master)
– Collect Missing Data Points
– Refresh Outdated Information
– Inactivate Old Accounts
• Understanding Suppliers
– Cross Supplier
– Parents, Subsidiaries
– Multiple Sites, Divisions, or Locations
• Prevent Fraud
– Average company loses 5% of its annual revenues to fraud (ACFE)
– 70% of companies were affected by fraud, up 9% from 2012 (Kroll)
o The largest area of increase was in the vendor master
o Supplier fraud increased from 7% to 19 % in only two years
o Only 30% of fraud was perpetrated by the vendors or suppliers themselves
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S a n i t i z e

18. Stabilize
• Understanding Errors
– Minimize Opportunities for Human Error
– Centralize VMF Ownership
– Utilize Single VMF Instance
– Implement Standard Operating Procedures
• Best Practices
– Standardize Naming Conventions
– Assure Segregation of Duties
– Create Add/Change Workflows
– Define Profile Completion
• Change Management
– Documentation & Audit Trail
– Change Approvals
o ~7% supplier change annually
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19. Optimize
• Governance & Controls
– Regulatory Compliance
– Risk Management
– Fraud Protection
• Supplier Collaboration
– Validation at On-Boarding
– Supplier Self-Service
– Cloud, Real-Time
– Automation
– Documentation &
• Spend Management
– Category Management
– Strategic Sourcing
– Spend Consolidation
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20. The Power of the VMF
Leverage
– Fraud detection and prevention
– Strategic Suppler Relationship Management (SRM)
– Create value chain partners,
o Improve working capital
– Improve accuracy of business transactions
– Document solicitation and retention
o (W9, W8, COI, Diversity)
– Accurate metrics and analyses
– Spend management
– Strategic Sourcing
– Exclusion list management
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21. Summary
• The secret is out
YOUR VMF IS CRITICAL
• Tell your secrets
– Executive Management
– Tax, Legal, Compliance
– Department Heads
– Supplier Relationship Owners
– Align AP, Purchasing, & Sourcing
• Achieve Best-In-Class
– Automate, Stabilize, Optimize
– Streamlined & Controlled Processes
– Compliance; Regulatory, Corporate, Contract
– Real-Time, Collaborative, Documented
– Comprehensive Profile Validation & Completion
– Supplier Self-Service
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22. Benefits to Thought Leadership Members
1) VMF Assessment Questionnaire
– PDF with Results
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2) VMF Analysis
– Potentially Duplicate / Related Suppliers
– Missing Data Analysis
* Backed by NDA and SSAE 16 SOC2
Type2 certification

23. Benefits to Thought Leadership Members
3) Institute of Financial Operations
– Free Copy of FinancialOps Magazine
– 10% Discount from Fusion Event
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4) Mary Schaeffer - AP Now & Tomorrow
– 90 day free subscription to Weekly E-zine
– Discount on Book “101Best Practices for AP”

24. Next Thought Leadership Events
"Secrets You Need to Know About your Vendor Master File."
March 26, 2015 - 11am PST
"Detox Your Vendor File."
April 23, 2015 - 11am PST
Jon Casher and Josh Morrison outline that much of the data and records
residing in your vendor file are unnecessary and even damaging to your
ability to complete your daily tasks and hit your strategic goals.
"How to Take your Vendor File to the NEXT LEVEL"
June 23, 2015 - 11am PST
Jon Casher and Josh Morrison walk through the six indispensable steps
of the ideal master vendor file. Learn what it takes to be among the
industry's best of breed.
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25. Thank You - Questions
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Josh Morrison, Sr. Consultant, Lavante
• Former F200 AP & Strategic Sourcing Senior Manager
• Extensive background in Procure-to-Pay & Supply Chain Relationships
• Expertise in Audit Controls, Compliance & Enterprise Systems
• Leading Process Improvement and Business Strategy Thought Leader
Josh.morrison@lavante.com
http://www.linkedin.com/in/joshmorrison
Joe Flynn, Founder & CSO, Lavante
• Former Director of Operations with Howard Shultz & Associates
• Recognized Industry-Leading AP & Procure-to-Pay Expert
• Pioneer of Industry’s Only Patented Automated Recovery Solution
• Father of 4 Wonderful Daughters
joe.flynn@lavante.com
http://www.linkedin.com/in/jflynn10