Procurement and Finance Fall Out All Too Easily – Let’s Kiss and Make Up

Yes, we have a brand new Spend Matters briefing / best practice paper to tell you about, and one thing is beyond argument – it has the most striking front cover of anything we’ve written in recent years!  (You can see part of it in the picture with this article.) That’s thanks to the folk at leading eProcurement solution provider Basware, our partners for the paper. They have done a great job on the design (not my strong point) of “Procurement & Finance – A Fine Purchase-to-Pay Romance Or The Best Of Enemies?” It’s not just the cover, either – the graphics continue inside …

You can download the paper now, free on registration here, and we hope you will find it useful and interesting – and enjoy the great graphics! Here is an extract to whet your appetite, as we start to look at those areas where procurement and finance can fall out all too easily.

 

Tensions and Pressures –“It’s Not Your Fault, It’s Mine”

Now we will consider some of those issues that can make even a beautiful relationship run into trouble. What is it in the P2P world that can make even the most collaborative procurement or finance executive start to regard their colleague in the other function as unhelpful, not strategically aligned – or just plain ‘difficult’?

  1. End-user convenience versus control

Make it easy for budget holders to spend money? Why would we want to do that”?

We have actually heard more than one CFO ask that question. Make it difficult, then they won’t spend much of the organisation’s money, is the thinking. In fact, there is considerable evidence that if you make the standard and approved processes difficult, all that happens is that people will find work-arounds to acquire what they need to actually do their jobs, and the control and visibility we mentioned earlier is also foregone.

Generally, procurement executives today have realised this and are looking to make it easy for users to buy, by following the compliant process. As long as proper safeguards are also put in place, then organisations are much more likely to “capture” the spend and manage it better. If budget holders are buying off-contract, it is better to know about that and understand why, rather than just complain months later when an audit discovers what has happened.

The solution: convenience need not mean lack of control - that is what all the stakeholders (procurement, finance and the business) need to understand.  Procurement should educate finance and explain that this is no desire for a ‘free for all’. But allowing people to buy what they genuinely need to do their jobs easily, efficiently and effectively makes absolute sense. Capturing spend through robust P2P processes and having the processes and systems in place to provide safeguards in terms of less acceptable expenditure is what the organisation must aim for.

 

To read on, please download the paper now, free on registration here. 

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