Finance And Procurement: The Case For Collaboration

It's nothing new; we talk about it all the time: finance and procurement need to work hand in hand if accounts payable automation is going to work. Listening to our speakers' presentations and their lists of critical success factors at the recent AP Automation summit, their messages were no different.

The question is, if it's such a commonly cited pre-requisite, what's stopping companies from doing it?

Scouring my notes from the conference, I've jotted down, in no particular order, some of the key points discussed around collaboration between procurement and finance.

• Supplier relationship management: with finance and procurement working together, your supplier data will be more accurate so you can easily identify your strategic suppliers, and spot the ones who are falling out of process and why


• Appreciate your differences: finance professionals will focus on control, segregation of duties, compliance and making accounting easy. Procurement wants the right goods and services to arrive at the right place, at the right time. You don't have to become an expert in each other's functions but you need mutual respect. As one speaker said, there's no point having an end-to-end process if you have brick walls between the functions


• Blur reporting lines: consider making accounts payable report to procurement or recruit a procurement professional into a finance-led P2P team
  Align goals: give finance and procurement shared performance goals and balanced scorecards


• Contracts and T&Cs: if you're rolling out e-invoicing, work with procurement at contract renegotiation time to introduce new terms and conditions to your suppliers


• Communicate: run internal trade fairs to help procurement teams understand your objectives and communicate regularly


• Data analysis: consider recruiting a supply chain management analyst to focus on getting the detail out of the data and delivering continuous improvement for procurement and finance processes. This will also help you take advantage of financing options such as early payment discounts and reverse factoring


• Multi-function collaboration: why stop at collaboration between finance and procurement? Every function that triggers an invoice needs to be on board with accounts payable automation activities.

These nuggets come from companies such as HP, Orange Business Services, Eaton Corporation and P&G, so there's considerable evidence to suggest they know what they're talking about.