To purge or not to purge: Handling inactive vendors

Stuck with inactive vendors but daunted by the thought of actually fixing your problem? Don’t be. The solution is probably less painful than you think.

Inactive vendors may leave the door open for duplication and fraud. But many companies balk at getting rid of these vendors. Why? They fear purging them from the master vendor file will be more of a headache than it’s worth.

The reality: Purging inactive vendors is a relatively simple task that only requires a few steps.

How often you actually purge inactive vendors is highly subjective, and can depend on a number of factors — rate file growth, risk of duplication and fraud vs. the cost of purging, etc.

If you’re wondering when you should purge a specific vendor, you may want to use these benchmarks as a guide. The recommended minimum period of inactivity for purging vendors is 15 months; however, the most common time is two years of inactivity.

1. Run a report. Pick a designated period of time — say 14 or 15 months — and run a report of all vendors that haven’t had any activity for that time frame.
2. Make the changes. After running the report, it’s time to alter the status and/or location of the inactive vendors. Depending on your company’s policy, this can be done either by archiving and removing them from your live master vendor file or by changing the vendor’s status to inactive/marking them in some distinctive way.
   Note: After you decide which vendors should be purged, let your purchasing department look over the list before taking action — they may have an explanation for why a certain vendor (or vendors) is inactive.