The warning and merge is a good concept, but maybe things could be a little more robust.
During the creation of a new supplier/Item etc. and a duplication is detected - you just get a simple dialog “Already Exists” and don’t allow any further progress. If its not created then there is no need for a Merge. If its been a keyboard entry error, you just start again.
Perhaps after the implementation of “Already Exists”, checking any existing files could be cleaned up with a once only running of a Detect & Merge feature.
With regards to duplicate Inv/PO etc. you have two options 1) as above “Already Exists” or 2) a feature where a user has the option of selecting “Auto Numbering” and where they nominate the next Inv/PO etc. number to be used and the system automatically increments and the form field can’t be edited.