Indirect spend in a decentralised organisation creates many issues. Decentralisation makes it more difficult to have visibility over the entire P2P (purchase to payment) process. In many AP departments non-PO issues of payment are only raised after the invoice is past due. This results in issues going undetected and bottlenecks developing which creates difficulties in forecasting as allowances must be made for unexpected expenses. By gaining visibility over your company’s indirect spend you can increase efficiency through managing spend and sourcing savings from faster payments.
The development of organisational silos poses problems for AP professionals as communication between departments vanishes. Instead departments should be working together to leverage synergies. One crucial element for effective communication across departments requires a reliable PO policy for indirect spend outlined for the procurement department. Suppliers can be negotiated with and added to a pre-approved list to minimise costs. Work with key executives across departments to ensure this policy is correctly introduced and followed. With automation the AP department can then easily match invoice to PO and goods received. This avoids having to manually process the PO’s. Without automation, in a decentralised organisation, handling this process manually removes the AP department’s focus from … Read More >