Articles
Reaching Out – How Companies Engage New Vendors
If this were Jeopardy, the category would be “Initial New Vendor Engagement,” and the $100 category clue would be “53 percent of organizations send new vendors this.” Are you ready to buzz in on that one? Correct response: “What is a W-9 form?” Good! You’re on the board. For the $200, answer: “Just 22 percent of organizations mail this.” Correct response: “What is a Welcome Letter?” But let’s use the James Holzhouer approach and choose Initial New Vendor Engagement for $1000, Alex. Answer: “Seven percent of organizations do this in regards to initial new vendor engagement.” Correct response: What is “Send Nothing!” The flip side of that is that 93 percent of organizations reach out to new vendors in some way, whether with a welcome letter or a vendor information form, or simply sending them a W-9 or W-8 form to complete. The complete picture of how organizations reach out emerges in VendorInfo’s 2019 Vendor Onboarding Management & Compliance Survey and in this chart: Twenty-nine percent send vendors information on “How to work with us.” Along with the 53 percent that send W-9 or W-8 forms, the same majority percentage say they send a “new vendor form,” which may incorporate a substitute W-9 together with other information...
01 May, 2019
What Are the Odds?
[vc_row css_animation="" row_type="row" use_row_as_full_screen_section="no" type="full_width" angled_section="no" text_align="left" background_image_as_pattern="without_pattern"][vc_column][vc_column_text] Non-Compliance Risk in 1099 Reporting Are you a gambler? Do you look forward to a conference in Las Vegas so you can get in a little action? How about when it comes to IRS compliance? No doubt it would be a thrill not to hear from the IRS if you veer widely outside of the lanes of IRS compliance. But what are your chances? VendorInfo has answers in its newly published survey report 2019 Vendor Onboarding Management & Compliance Survey. The report looks at three potential consequences of compliance failure: B-notices, 972CG Notice of Proposed Penalty, and audit for review of compliance with respect to accurately documenting and validating payees. In the first case, B-notices, a failure to include a vendor’s tax ID number (TIN) on a 1099 or a mismatch between vendor name and TIN on the 1099 will result in receiving a “B-notice.” The “B” is for backup withholding, which is required when you lack a correct TIN for a vendor. What you actually receive is a notice CP2100 or CP2100A from the IRS. Upon receipt, you have to take certain steps right away in order to either correct the problem or begin backup...
16 April, 2019
Secure Inquiry, Simple Inquiry
If you could affordably automate a time-consuming and interruptive task, you would do it, right? “Yes, but.” Solutions are often put to us simply. But our minds immediately go to possible problems in the plan. “It’s not that simple,” we think, and a number of “What-about’s” occur to us. When it comes to automating a targeted process like vendor invoice inquiry, one of those “What-about’s” should be security. How do we allow vendors access to the information they want while protecting our systems and data from compromise? At the same time, we’re concerned with usability. A vendor self-service system needs to be simple. If it’s not easy to use, vendors will skip it and just call — back to costing us time and money. So a useful vendor inquiry system must be simple enough that vendors will use it, but secure enough to guard the organization’s systems and digital assets. These are questions an organization should ask of any vendor portal solution provider: How do you keep our system and data secure? Is it easy to use? Make sure you understand the answers. The answer to the latter question will be evident. You will be able to see and understand whether a solution will...
03 April, 2019
Old Adages, Modern Rule
What do errors cost? In baseball, sometimes the game. What about in business, in particular data errors? A quality management concept developed by G. Loabovitz and Y. Chang quantifies the cost of error prevention versus remediation versus failure. It’s the 1:10:100 rule. The authors determined hidden costs of errors expand exponentially. In their studies they found that if prevention costs X dollars, then remediation in the case of failure to prevent the error costs ten times X dollars, and the consequences of bad data left uncorrected are one-hundred times X dollars! Remediation costs more than prevention, and failure costs more than remediation. The focus, often on remediation, should be put on prevention. Our forebearers said things like “A stitch in time saves nine” and “An ounce of prevention is worth a pound of cure.” The principle is the same, but the professors have quantified it in their eye-opening rule. The rule has implications and applications for P2P. Leading experts like Judy Bicking point out the fallacy of saying “We don’t have time” to do something right the first time; you end up having to make more time to fix it. The 1:10:100 rule warns that it’s going to cost you a...
20 March, 2019
New Vendor Onboarding: Hands On or Hands Off?
Are you crafty? Handy? Do it yourself? Many of us like doing things by hand — some things, anyway. But let’s face it, there are other things we’d rather not have to do manually. How about in our P2P lives? More specifically, how are organizations accomplishing vendor onboarding these days? Have companies automated, or is it still largely a manual process? This question is included in the latest survey from VendorInfo. The new survey will be released soon, but here is a sneak peak at the answer to this question. When it comes to onboarding new vendors, the process for most organizations is [drum roll please]: still manual. Yes, a year away from 2020, and the majority of organizations are still pushing paper forms out to new vendors to fill out and send back. The good news? There appears to be movement in the right direction since last year’s survey. Sixty-two percent of participants indicate they onboard new U.S. vendors manually. That’s down from 69 percent a year ago. When foreign payees are specifically called out, the percentage is 63, which actually represents a big improvement over 2018. Roughly a quarter of organizations utilize both manual and automated processes for onboarding. Those that say their...
06 March, 2019
Good for AP, Good for Vendors
Enlightened self-interest says looking out for others is a good way to look out for us. Fundamentally a business is created to meet someone else’s needs in order to meet its stakeholders’ own, and is successful when it does so. However, occasionally we get lucky. Something we must do to look out for ourselves also brings direct benefit to our customers. In the realm of accounts payable, our “customers” are those we serve, including managers, purchasers, the tax department, and of course, vendors. Vendor relations are an important aspect of vendor management, and accounts payable (AP) has a significant part to play. But a tension exists between AP’s competing demands, including its role in supporting good vendor relations. Into the execution of AP’s multiple responsibilities come interruptions. Inquiries from vendors about their invoices and payment status take AP away from the very work of moving invoices forward to payment. And vendor inquiries often come via purchasing — creating a double interruption from the company standpoint. On one hand, AP has a need and responsibility to reply to the vendors. But on the other, the calls or emails and the responses to them interrupt AP’s work of actually getting vendors paid, at significant cost. So suppose AP can...
19 February, 2019
Is TPA (Targeted Process Automation) Low-Hanging Fruit?
In every endeavor success entails analyzing problems, finding options to solve them, making decisions, prioritizing actions and execution. Problems come in all shapes and sizes. Complex challenges must be broken down into executable pieces. More serious challenges bring with them additional pressures to find options and make decisions. These days, the broad challenges included in most management performance goals often center on increasing the value of those outcomes for which the manager is responsible. It’s nice, when identifying opportunities and prioritizing steps to reach them, to find some things that can be done quickly to realize benefits or clearly demonstrate movements in the right direction. The old phrase for those things is “low-hanging fruit,” what our grandparents often called “easy pickings.” But that phrase can carry with it a negative tinge. Especially if it refers to things that bring immediate gratification, but do little for long-term gain. If it’s an avoidance of harder work to be done, it might be merely a distraction disguised by momentary gratification, like a grab at the candy bowl. On the other hand, picking the “fruit” in reach may be the most sensible thing to do. Targeted process automation is a case in point. Replacing specific manual processes with...
05 February, 2019
IRS Mileage Rate Increase Now in Effect
It’s January and we’re taking a break from our usual topics to ask: Have you reset your mileage rates? In case you missed it, the IRS announced a change for 2019. The deductible rate for mileage has increased as of January 1. The new rate for business mileage (for cars, vans, pickups or panel trucks) is 58 cents, an increase of three-and-a-half cents over the 2018 rate. Rates for medical or moving purposes increased two cents to 20 cents per mile, while the rate for charitable organizations remained unchanged at 14 cents. Businesses may reimburse employees for business miles at whatever rate they wish, whether at, less or more than the IRS-set rate. However, any reimbursement greater than the IRS rate of 58 cents per mile must be reported as income to the employee. Most organizations polled reimburse at the IRS rate, while a few reimburse under the IRS cap. Despite the current lower gasoline prices, the new rate is the second highest in the last 20 years, a half-cent less than the rate for the period of July – December 2008. That year saw a precipitous rise to record heights in the price of oil (more than double the start of...
22 January, 2019
Resolving Resolutions
Have you made resolutions for the New Year? Good for you! Though statistics may be against the majority of us seeing them through, make them anyway. We all need a reset from time to time. Take the New Year as a fresh start. Make at least a modest change and gain will result (even if you aren’t still doing next November what you start this January). In our personal lives, there are a host of possible resolutions — Lifehack.com lists 50 resolutions for the New Year! No doubt they don’t intend for every reader to adopt the entire list, but there’s no better way to guarantee failure than having too many resolutions. Resolutions require change and who finds that easy? Scaling that back to just a few — hey, even one — seems a better route to success. One pundit proposes resolving in three areas: health, happiness and character. Do something for your health. Do something that makes you happy. Do something to grow your character. Don’t do 50 things; but do something. In our work lives the New Year offers a new start as well. At the end of the year, we stand back to look at how things went. Hopefully the year...
08 January, 2019
