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9 Steps to Cleaning the Vendor Master File – Part III

Cleaning your vendor master file is an ongoing and vital project to avoid errors, payment delays, regulatory violations and fraud. Part I and Part II of this series outlined the first five steps of a thorough plan. Here in Part III are the final recommended steps.

Steps six through nine include sanction list reviews, bank account verification, optional insurance verification and other special verifications according to your organization’s particular needs, such as ISO or SOC requirements.

The nine steps challenge many shared service centers or AP departments. Consequently, there are gaps in many organizations’ vendor information files that represent risk. Organizations are finding a solution by automating many checks and verification processes. Third-party partners have specifically designed solutions to address these verifications on scale.

Step 6: Validate Sanction and Exclusion List Compliance

Use a vendor’s legal name to verify that watchlists have not added it. Sanction screening is an essential ongoing step because a sanction or exclusion list can add an existing vendor after you onboarded or last validated them. Paying vendors on these lists may result in civil or criminal penalties for your company.

Here are three significant US sanction and exclusion lists. Be sure to add any additional that may apply to your organization:

• Office of Foreign Assets and Control (OFAC) of the US Treasury Department
• The System of Award Management or SAM/Excluded Parties List System (EPLS)
• The List of Excluded Individuals and Entities or LEIE (Healthcare-related)

Keeping up with ever-changing sanctions requires regular review, not an annual or even quarterly vendor master review. However, a third-party service such as VendorInfo makes compliance possible and easy, as it automatically cross-checks your vendors and specified sanction and exclusion lists daily.

Step 7: Validate Bank Details

As more payments have shifted to electronic, this step is vital. You want to validate bank details, including account ownership, ABA routing numbers for banks.

Account number verification alone does not provide the protection you need! Ownership confirmation is a critical piece. Note, too, that routing numbers can change even when the bank account does not, and an incorrect routing number in an ACH incurs returns and, eventually, fines from NACHA.

Here again, third-party services like VendorInfo automate this challenging process.

Step 8: Verify Insurance

 This step is optional, but some organizations and industries require it. You want to verify if the vendor has the appropriate insurance coverage, such as general liability or workers’ compensation, to perform services for your company. You may also want to ensure the insurance is current and not expired.

Step 9: Verify Other Information

The final step is to verify any additional information required by your organization, industry or regulatory requirements. This step may include verifying if the vendor has the appropriate certifications, such as ISO or SOC, or ensuring that the vendor complies with environmental or social responsibility requirements.


Maintaining a clean vendor master file is essential for compliance, effective financial management and fraud risk reduction. By following the nine steps outlined in this series, you can ensure that your vendor master file is accurate and up to date.

It is important to remember that this is an ongoing process you should perform regularly to keep your vendor data clean. Factors such as vendor types, industry regulations and internal policies impact what you need to do. Third-party services can maintain several difficult and ongoing tasks, eliminating worry and narrowing the scope of what you must do yourself.

To learn how VendorInfo can help keep your vendor master file clean and up-to-date, contact us.

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