It’s always smart to have a back-up plan in mind, especially when it comes to your vendors.

But there’s also potential for a backlash hiding in your reserve of inactive vendors: Duplication of orders, and even fraud.

Good news: Reducing the risk of these isn’t as complicated as you might think. After all, it’s the fear of complexity that’s keeping many Purchasing & Procurement pros from purging their vendor rolls.

The final decision to keep or cut loose an inactive vendor of course lies within your own company, based on your unique standards.

But there are some general guidelines that can help you pave your own path.

For example, one benchmark for jettisoning inactive vendors generally occurs at 15 months; the most common standard is two years.

Here’s a guide to help your decision-making process:

• Gather the facts. Run an audit of your records. Identify vendors you haven’t used for a decided-upon period — say 14 or 15 months.
• Update the records. Sort your inactive vendors into more easily identifiable categories. Based on industry or individual needs, these categories can include: archiving the vendor’s records; removing the vendor’s name from your live master file; creating a designation for inactive vendors in your file, so they’re easily identified.
• Get everyone on board. Share your findings with the other key players in Purchasing & Procurement, and ask for their input. There might be reasons — not always obvious — why specific vendors need to remain in play, despite recent inactivity.

Tags: inactive vendors, procurement, purchasing, vendors