Intercompany Vendors
The "Add Inter-Company Vendors" setting determines how your taxonomy treats transactions occurring between different entities within your own corporate group. Configuring this correctly is vital for preventing "double-counting" and ensuring the accuracy of your total spend figures.
🏢 The Concept of Internal Transactions
In large organizations, subsidiaries often transact with one another—for example, a global IT Shared Service center billing a local manufacturing plant.
- The Identification Challenge: The billing entity appears as a "vendor" in the buyer's system.
- The Analytical Risk: If these internal transactions are treated as standard spend, your Third-Party Spend figures will be artificially inflated, leading to inaccurate market leverage analysis.
⚙️ Configuration Impact
This field defines your classification strategy. Choose the option that aligns with your primary reporting objective:
| Selection Strategy | Impact on Analysis | Primary Use Case |
|---|---|---|
| Exclude (Standard) | Maps internal vendors to a "Non-Spend" or "Interco" category, removing them from procurement totals. | Strategic Sourcing: Used to calculate true third-party spend and external market leverage. |
| Include (Specialized) | Treats internal entities like external vendors, classifying their services under standard categories. | Cost Allocation: Used for internal chargebacks and cross-entity financial reconciliation. |
🔍 SpendCraft Pre-Identification
When you see a notification such as "(X vendors identified)", SpendCraft has already cross-referenced your raw data against known internal entity masters.
This automated detection allows you to apply your chosen rule across the entire dataset instantly, ensuring that