In some ERPs like PeopleSoft and SAP, vendor addresses can be validated real-time, geocodes and tax code identifiers can be added to the vendor record. If you don’t use a system that has that capability, or even if you do, it does not standardize the address. This can result in a vendor master file where the addresses are based on which team member entered them such as “P.O. Box” vs “PO Box” or the non-standardized “Suite 500” being on the second address line vs “STE 500” on the first line with the street address. Errors in addresses can lead to delayed receipt of check payments, or the return of checks which can lead to uncashed checks and the task of unclaimed property. It can also lead to the return of 1099/1042 forms.
Time to Scrub the Addresses in the Vendor Master File
Cleansing the addresses in your Vendor Master File is best when done as part of a Vendor Master File data review. This includes inactivating vendors that have not done business with your company in 12/15/18/24 months, identifying duplicate vendors, etc. See my eGuide or Toolkit for the complete process.
They are the only free options that I have used, you’ll notice below that the United States Postal Service (US) and the Universal Postal Union (International) have been left off of the list. While USPS has an API, and UPU has an EDI option, neither really have an option for a bulk upload or API that can be used for database address cleansing. the Universal Postal Union does include links to websites such as Uniserv that can standardize address formats and more based on the country, some free, some paid.
Alternatively, I have listed options that I have used either directly or indirectly (client) in the past. Two are US only and two are US and International. All have APIs (yes, even TINCheck.com), and all are paid services.
TINCheck.com – at the time that you do the IRS TIN Match – you can also enter the address and it will check against USPS formats and standardize, adding the +4 in the zip code. It does not check to verify the address matches TO the vendor, only that it is a valid address. While there is a bulk option for TIN Match and other validations, there is no bulk option available for verifying addresses. The same way TINCheck.com integrates with irs.gov for real-time validation of your vendor’s Legal Name and Tax ID, they do the same with USPS. US Only
Melissa Data -- Provides services such as address standardization, verification and correction. Services also include Change of Address, email and phone number verification, can parse your data to identify duplicates, as well as verify the address matches TO the vendor. Has both US and International (240+ countries) address plans.
GIACT Systems – They are a reseller of Early Warning, a validation of bank account ownership, vendor Legal Name and Bank Account Name/Bank Account Number. They also validate the addresses matches TO the vendor and is valid. Subscription based, so it is a paid service, but both features are critical to today’s validations. Bulk option available only via return of vendor data (including address) when requested, but it is available. US Only.
SmartyStreets -- 4 Does not match TO the vendor, but will tell you whether an address is inactive, invalid or vacant – more than what USPS provides. They have a single address verification tool and a bulk upload option is also available. Both options converts addresses into USPS format. Has both US and International (240+ countries) address plans.
Bonus: Internal Fraud Prevention - While you are cleansing addresses as part of your regular Vendor Master File Data Review, don’t forget to check them against your companies HR file. This is an internal control that will uncover if any employee addresses match vendor addresses, which can uncover internal/occupational fraud.
Bonus: External Fraud Prevention – Notice any PO Box only vendors? This could be a sign of a fraudulent vendor. Follow-up with the vendor to obtain a physical address. If the vendor does not respond or refuses, review their invoice and payment activity and verify whether your company was a victim of fraud.
Once this process is complete, if there are any issues with the address such as not being a valid address – reach out to the vendor and resolve BEFORE the next payment. If the vendor does not respond, place the vendor on payment hold until they do.
Does your department have any other tips to validate addresses? I’d love to hear about it – comment below or email me at firstname.lastname@example.org.
Looking for an 8 Step Process to clean Your Vendor Master File in your Vendor Setup & Maintenance process? Get the eGuide or Toolkit.
Debra R. Richardson,
MBA, APM, APPM, CPRS
Debra is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors and Aramark.
For the past eight years, Debra has focused on Global Vendor Maintenance, and implemented a vendor self-registration portal for 140k+ global vendors across five Accounting Systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file.