Post on 23-Jul-2015
transcript
Every business wants Purchase Control…
• Control Spend• Precise coding• Efficient Process• Visibility
• Requests/Authorizations• Receipting• Invoice Approvals/Variations
• Reporting & Analysis:• Commitment• Accrual• Spend analysis/trends
Requisition
Approval
PO Raising
Receipt
Invoice capture
Invoice matching
Exception handling
Reporting
If it’s so easy…. ……why hasn’t everybody done it?
1. Nothing in it for anyone but the FD – hard to get the “Go!”• ERP’s POP Modules inadequate or wrongly focused or both – by Finance for Finance• Attempt(s) have failed in the past (previous) – what’s different now?• The worse the system the “happier” the employee!
2. They think they already are doing it…(“Make do”)• Control but no visibility: “Spreadsheet ops” & Paper is not perfect either!• Process is often bypassed/worked around• Not systematic (Complete, Consistent, Visible and Audited)
3. They (think they) can’t afford/justify it• Financial cost• Time cost• Complex offerings
E.g. Adactus Housing Association:
• No Central PO management (spreadsheets etc)• Had already purchased POP module of ERP system• More recently had already implemented Invoice Processing• Still wanted a purchase control solution because:• Operational “fitness” – strategic aim• Auditor demand• Demonstrate VFM – an HA community directive
• But:• Non-Finance users would not accept ERP POP user interface for PO control• Finance felt this undermined credibility to roll out across business
Adactus – ERP POP Module Complaints….
Embarrassing and infective to roll out
The UI is Counter intuitive Only a few users can raise orders, I want everyone to be able to
The overall process was ‘clunky’ and not slick – too time consuming
User has to switch between workgroups to
enable them to carry out different stages of
the process – crazy & extremely time
consuming!
Slow system performance & the system freezes
No system of notifications
Training intensive
Order matching / receipting is very time consuming
Approvers have to visit 2
different
screens to APPROVE a PO
Overall lack of automation!
The Evil PO….
The Purchase Order is usually presented as the hero but has often turned out to be the villain:
• Items from different budget holders• Piecemeal delivery • Part invoicing – premature closure of Order
Increases complexity, exceptions or compromiseDisengages employees & drives workarounds
PO should be the means, not the end in the PO process
PO
Engagement
• Visibility• Reporting• Minimal Setup/admin
• Enabled - Simplicity• Empowered• Involved• Confident
• Budget• Authorisation• Delegation• Oversight
”Something in it” for everybody…
• Freedom from transactions• Spend Analytics
CFO
Employee
Budget Holder
PurchasingManager
Disentangle the PO from Internal Process
Item level Authorization
PO transaction
Budget Holders
Employees
Supplier
Part or full invoicing
Item/Line level receipting
Payments
Item level Processing
The Invoice Pantomime
• Untrusted order time data• Long Approval chains• Slow payment sign off• Incorrect coding
”…Oh no it isn’t….”
System Requisition
Approval
PO Raising
Receipt
Invoice capture
Invoice matching
Exception handling
ReportingEnd to End Trusted Data
Adactus Housing: 1 year on
• 350 Users• All overheads now requisitioned & authorized via browser• All overheads have a PO• …and soon no Invoices accepted without PO ref.• Full visibility of Commitment• Full visibility & Audit of this process• Happier auditors.
Summary
• Engagement - it’s about everybody• System - Get the right data, and the data right, right at the start• Trust your process & data – avoid the Invoice Panto
….and remember, it’s a process - so refine & repeat