In Finance and Accounting (F&A), Procure to Pay (P2P) is one of the most sensitive and business-critical functions. Vendor master data may appear straightforward, but even minor oversights in this area can create significant downstream challenges. This case study highlights how duplicate vendor records under a single entity led to financial leakage, compliance risks, and operational inefficiencies – and how corrective and preventive actions transformed the experience into a valuable lesson.
The Case: Multiple Vendor Records for One Vendor
The vendor management team received a request to create a new vendor profile. During their review, the search was performed using only the vendor’s name. Other identifiers, such as banking details, VAT codes, and addresses, were overlooked. As a result, a new vendor ID was created even though one already existed.
Invoices were subsequently processed and paid to both vendor records. The issue surfaced when the vendor themselves reported receiving a duplicate payment. Further investigation revealed that while the banking details matched, a small variation in the vendor name had caused the creation of a duplicate record.
The Impact
The duplication created several issues that went beyond financial loss. Duplicate payments had to be recovered, vendor balances became unnecessarily complex to reconcile, and the organisation faced increased risk of non-compliance and audit observations. More importantly, incidents like these can erode vendor confidence and put strain on long-term relationships.
Root Cause Analysis
The problem originated with a narrow search process. By relying solely on the vendor’s name, the team failed to verify other crucial details that could have prevented duplication. Without a robust review mechanism, the duplicate record was created, and invoices were processed against both records.
Corrective Actions
To resolve the immediate issue, the valid vendor record was retained and the duplicate was blocked to prevent future use. Outstanding balances were transferred to the correct record, and duplicate payments were recorded as a debit balance. The team then engaged with the vendor, who agreed to offset the excess payment against future invoices, allowing for a practical resolution without escalating the matter further.
Preventive Measures
To safeguard against recurrence, the vendor management process was strengthened. The team now conducts more comprehensive searches using bank details, VAT codes, and addresses in addition to names. A four-eye review mechanism was introduced for all vendor master setup and change requests, ensuring oversight and accuracy at every step.
Looking Ahead
This case underscores the importance of diligence in vendor master data management. A seemingly small error can have far-reaching consequences, from financial exposure to compliance challenges and strained vendor relationships. The key is moving from reactive problem-solving to proactive prevention by embedding stronger controls and governance into the P2P process.
At Right Path Global Services, we help organisations strengthen their P2P operations by designing smarter vendor management frameworks, embedding preventive controls, and enabling teams with best practices that minimise risks. By partnering with us, businesses can ensure accuracy, reduce compliance concerns, and build lasting vendor trust. Looking ahead, it is this proactive approach that transforms F&A operations into a true enabler of sustainable growth.
