Vendor Management Flashcards
7 cards from real ERP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Vendor Management flashcards as text
What is 'three-way matching' in ERP vendor management?
Answer: Comparing the purchase order, goods receipt, and vendor invoice before payment
Three-way matching compares the purchase order, goods receipt, and vendor invoice to verify accuracy and prevent fraudulent or erroneous payments.
Which ERP capability allows organizations to negotiate and store pricing agreements with vendors in advance?
Answer: Outline Agreements / Contracts
Outline Agreements, such as contracts and scheduling agreements, store pre-negotiated pricing and terms that auto-populate purchase orders.
In vendor management, what does 'dual sourcing' refer to?
Answer: Purchasing the same material from two separate vendors to reduce dependency risk
Dual sourcing is a supply chain strategy where a company uses two vendors for the same material or service to reduce single-source dependency risk.
How does an ERP system typically handle vendor payment terms such as '2/10 Net 30'?
Answer: It stores terms in the vendor master and automatically calculates discount deadlines on invoices
ERP systems store payment terms in the vendor master and automatically compute discount due dates and net payment deadlines on each invoice.
What is the purpose of a 'vendor evaluation system' in ERP platforms like SAP?
Answer: To score vendors on criteria like price, delivery, and quality for objective comparison
The vendor evaluation system provides weighted scores across criteria such as price, on-time delivery, and quality to objectively rank and compare vendors.
In ERP, what triggers the creation of a vendor liability when goods are received?
Answer: Posting of the goods receipt against a purchase order
When a goods receipt is posted against a purchase order, the ERP system automatically creates a goods receipt/invoice receipt (GR/IR) clearing account entry, establishing a vendor liability.
Which best practice ensures vendor master data quality in an ERP system?
Answer: Implementing centralized vendor master data governance with defined approval workflows
Centralized governance with approval workflows prevents duplicate records, ensures data accuracy, and maintains compliance in vendor master data management.