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Vendor Number

The vendor number is a critical identifier for tracking supplier interactions. Learn how organizations utilize vendor numbers for streamlining record keeping.

Jonathan Haney headhsot
Jonathan Haney

Senior Director, Marketplaces

Modified on

August 28, 2024

What is a Vendor Number?

A vendor number is a unique identifier that organizations assign to suppliers as a way to easily identify third-party providers for numerous reasons. Organizations use this identifier to track vendor transactions, streamline procurement efforts, and maintain records of interactions between the client and supplier. In facilities management, vendor numbers are vital for organizing and managing activity details associated with service providers and suppliers.

Purpose of a Vendor Number

Different companies may use various terms to refer to the vendor number, such as vendor ID or vendor code. In each case the identifier serves the same set of purposes for business operations, including:

Transaction Tracking

A vendor number enables efficient and accurate tracking of purchases, payments, invoices, and deliveries applicable to a specific vendor. Employing a supplier identifier ensures that a client company’s purchasing agents, facilities managers, and accounting department follow the correct trail of records, especially if different suppliers have similar names. 

Database Management

A vendor number is useful for organizing third-party provider information within a company’s database. A vendor number ensures that staff can efficiently retrieve and manage vendor details in a computerized maintenance management system (CMMS), accounting software, or any other platform used to track and manage suppliers and service providers. 

Financial Processing

In accounting systems, a vendor code is vital for processing financial transactions. It enables accounting departments to easily manage vendor invoices and payments to ensure that all transactions are accurately processed.

Reporting and Analysis

The vendor number provides a reference point for aggregating vendor data. This helps in all manner of data analytics, from examining company spending patterns to evaluating the performance of a supplier, partner contractor, or third-party subcontractor.

Assigning Vendor Numbers

Clients typically assign vendor numbers when the provider or supplier is first added to a company’s vendor-management system or procurement database. This ensures that the appropriate departments can locate and identify vendors by the number assigned to them. The process of assigning a vendor number usually involves these steps:

Vendor Onboarding

When a new vendor has been selected, either the computer system or the department facilitating the onboarding assigns the supplier a number based on predetermined parameters.  

Data Entry

Once the vendor code has been generated, critical vendor information is associated with that identifier for future reference. This information typically includes the vendor’s name, type of service, address, contact information, and other information the company relies on for tracking and managing vendor associations.

System Integration

After the vendor number and information is entered into the primary computer system, that data is then integrated into all relevant business systems. Integrations such as these enable all active systems to remain connected and relay relevant information between them. Integrated systems might include accounting software, procurement databases, enterprise asset management (EAM) systems, and inventory-management platforms.

Characteristics of Vendor Numbers

Companies may use completely different formats and styles to assign their vendor numbers. Despite these differences, all vendor IDs typically share one or more of these characteristics:

  • Unique: Each vendor number should be unique to prevent confusion between different vendors.
  • Consistent: The format for vendor codes should be consistent across the organization to ensure uniformity.
  • Memorable: While uniqueness is key, vendor IDs work best when structured in a way that makes them simple to use and easy to remember.

Benefits of Vendor Numbers

Companies use unique codes to identify a number of elements of their business, and vendors are a critical component of any organization’s operation. As such a vital part of an organization’s dealings, vendor IDs provide several distinct advantages, such as:

  • Enhanced efficiency: A vendor number gives personnel a streamlined approach to quickly identifying vendors in their system and accessing relevant information for a variety of purposes.
  • Increased accuracy: A unique number to identify each contractor greatly reduces the risk of errors in vendor-related transactions.
  • Effective document management: Unique identifiers help to maintain an organized system for organizing and managing vendor records.
  • Improved security: By limiting the visibility of vendor details, a vendor ID allows system users to effectively do their jobs without accessing sensitive information.

Managing Vendor Information

Effective vendor-number management is important for maintaining organized records. Strong vendor management activities include:

  • Regular updates: Keeping vendor information current helps to ensure that all transactions are processed correctly.
  • Secure access: Implementing access controls helps protect sensitive details, such as a provider’s banking information.
  • System integration: Using the vendor number as a point of reference helps make the process seamless when integrating with other business systems.

Vendor Numbers in Conclusion

A vendor number is a simple but powerful tool for facilities management and office recordkeeping. Facilities managers see the benefit when dealing with numerous service providers and suppliers. By assigning a unique identifier to each vendor, managers and financial personnel can enhance operational efficiency, maintain accurate records, and streamline financial and procurement processes.

ServiceChannel is a powerful facilities management platform with effective tools to help manage vendor relationships and a host of other facility management responsibilities.

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