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Supplier risk intelligence
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Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
How risky are supplier files, really?
How well do you know your suppliers and the potential risks they pose to you? Yes, your team did the due diligence at onboarding. But what about afterwards?
An ungoverned supplier file is a hotbed for duplication, dormancy, one-time suppliers, non-compliant detail changes, and missing information. Suppliers get added, bank details change, accounts fall dormant, and those alterations add up. When coupled with digital transformation efforts, mergers or acquisitions, and ungoverned supplier file can be an incomprehensible mess. In all likelihood, you supplier file looks entirely different since your team last checked. The risks below are what tends to be hiding inside it.
Examples of supplier file risks
Fraud risks
Dormant suppliers are accounts that were once active but haven’t been used in a long time. They’re a favourite route for fraudsters. Transparent‘s research puts the average share of inactive vendors at 73%, against a best-in-class benchmark of 24% cited by IOFM. Our own data suggests the average sits around 54%.
Duplicate suppliers are the same vendor set up twice under slightly different details. They open the door to both fraud and accidental double payment. Transparent puts the average duplicate rate at around 1% of the file.
Compliance risks
Paying a supplier on a sanctions list is a breach whether or not you knew they were sanctioned. The list of who’s sanctioned changes constantly, so a supplier that was clean at onboarding may not be today. OpenSanctions currently lists over 23,000 entities connected with the UK alone.
Overpayment/ late payment risks
Duplicate payments (paying the same invoice twice, often because of a duplicate supplier record) cost roughly 1% of an organisation’s total spend. On a large ledger, that 1% can start to add up.
Incorrect or missing supplier details cause a quieter version of the same problem: money going to the wrong place, or payments failing and having to be chased. Transparent found that 54% of suppliers had no VAT number recorded, that’s not to mention the other details that may be incorrect.
Supply chain risks
A supplier’s financial health can deteriorate long after you’ve approved them, and if one goes under mid-contract you can lose money and continuity at once. Experian found that 9% of medium-sized businesses carried a credit score rated above-average or high risk. Without ongoing monitoring, the first sign of trouble is often the supplier failing.
Now, some of these are recoverable – but some have a heavier price than others…
What are the costs of supplier file risks?
Supplier file risks run into thousands, and much of the money never comes back.
Supplier insolvency
One FISCAL customer had a supplier liquidated at zero and lost £28k in open credits. Another wrote off £23k they couldn’t recover from a supplier that went into administration. That money is simply gone.
Duplicate payments and overpayments
Recoverable in theory, not always in practice. FISCAL’s own benchmarking shows that in paid-in-error cases where recovery was attempted, about 12% of the money was never recovered.
Fraud
Worse still. According to the ACFE’s 2026 Report to the Nations, most organisations never get their money back: 56% of victims recovered nothing, 29% recovered part of it, and only 15% recovered in full. The ECCTA’s Failure to Prevent Fraud Offence also brings its penalties when it’s applicable: Unlimited fines.
Sanctions breaches
If you pay a sanctioned supplier, fines can reach the greater of either £1 million or 50% of the estimated value of the breach, alongside potential prosecution, frozen assets and public association with a sanctioned entity.
Reputation
Reputation is the thread that runs through many of these, but it’s not so easy to define the losses. Actions and associations from adverse media, a sanctioned supplier in the news, an internal fraud case, a pattern of late payments… They all can affect how your business is seen by customers, suppliers and the stock market. Trust takes far longer to rebuild than a loss from fraud.
A classic example is that of Arthur Andersen, in 2002. It was one of the “Big Five” audit firms, brought down by its role in the Enron scandal. Once indicted for shredding documents, clients fled almost overnight. The firm went from around 85,000 employees to effectively nothing. The criminal conviction was later overturned, but the reputational collapse was irreversible – trust was gone.
Is onboarding due diligence enough to stop supplier risk?
The short answer? Absolutely not.
Onboarding checks catch what’s true on day one. They tell you nothing about day 100. Supplier file details change daily, whether it’s a bank account changing, a new supplier, or an old supplier that should have been made inactive.
There are more reasons than ever to keep checking after onboarding. ECCTA now puts the onus on the organisation to show its fraud prevention procedures were reasonable, which makes the failure-to-prevent-fraud offence a high-level concern.
To truly protect your organisation from fraud, supply chain collapse, sanctions non-compliance and other threats, daily monitoring is the ideal to strive for. Master supplier files change daily, so to keep up, controls should be performed at the same rate.
How do you control supplier file risk?
- Decide who owns the file. As part of the P2P process, the master supplier file often belongs to everyone and no one, with nobody accountable for upkeep. Name a person and department, make file cleanliness and accuracy part of their remit, and everything downstream gets easier.
- Put a daily control in place. Monitor the file for risk continuously, rather than waiting for an audit or an incident to surface it. Best in class controls flag multiple issues at once (fraud signals, duplicates, sanctions and informational changes).
How FISCAL helps
Enable continuous monitoring for your team with the help of our software. It monitors credit scores for UK suppliers, so you can prepare for potential supply chain problems and negate financial loss.
Protect your organisation from financial loss, liability and disruption.
