We're all working with limited resources these days, however, that shouldn't limit your ability to manage your vendor list.
Consider regularly reviewing the list of vendors in your accounting software. Ideally, you will have internal controls to prevent unauthorized users from adding vendors. The next best thing is to export your vendor list and scan it for anomalies.
Take for instance the following list;
ABC Subcontractor
ABC Subcontractor Inc.
BEC Construction
Bryan's Plumbing
Brian's Plumbing
Construction Partners LLC.
Windfall Associates
Windfall Construction
Notice the differences between the first two vendors and the fourth and fifth vendors on the list? When checks have been printed and ready for signature, it's easy to overlook these differences. They don't look that different in the grand scheme of things. Now mistakes happen and vendors can be entered twice using slight variations, but you should still investigate.
Brian's Plumbing could be a shell company the AP clerk created to embezzle money from the company. When the check comes to you for signature, you think "oh yeah, that's Bryan's Plumbing, one of our most trusted subcontractors. Let me sign this real quick and get it back to you." The clerk takes the check to his bank and cashes it to his company's account and then transfers the money to his personal account.
It's also beneficial to make notes on what the vendors are used for. If you know Windfall Construction, but don't recall Windfall Associates, do some research.
Setting up fake vendors is one of the easiest ways for people to embezzle from a company so please be on the look out.
Thanks for tuning in!
If you have any questions, don't hesitate to reach out!