Why accountants should care about “boring” purchase order
Accountants and controllers, you and your departments are always in a constant grind, I’ve been there. Whether it involve cutting cheques, posting general journal entries, processing invoices and purchase orders, prepping payroll or running through the month end/year end hamster wheel, there is always something to do!
So why should you take interest in the emerging area of e-procurement/e-purchasing software? Well, this is what I’ve found so far from the accountants that have wisely adopted a smart process and the right tools to back them:
1) Stop Wasting Time you Don’t Have
If you are ever spending time being an internal investigator trying to scramble and figure out:
-Where did this invoice come from?
-Why is this invoice wrong? (Side note – 10 to 30% of invoices are disputed without a proper process)
-Who approved this spending?
-Where do I record this purchase?
-Where’s the purchase order or packing slip to match against this invoice?
-Should I pay this invoice yet?
Then your organization is not doing purchase orders properly, plain and simple, and you and your colleagues are wasting time
2) It’s about Accountability – Stop Being a Mom
You are just one department making sure the books are good, regulatory requirements are met and funds are spent properly. Other departments are the one’s engaging in the actual spending and making sure budgets are met. It’s not your role to be everyone’s mother. If the phones are ringing or employees are constantly emailing you to create purchase orders, check on transactions, or figure out what the heck is going, your process is broken.
Proper process ensures other departments are accountable for their own decisions.
3) It’s about Internal Controls and not “I create a Purchase Order after the Invoice comes”
Internal controls, they can be a pain, but they are necessary. Fraud risk always exists and audits always occur. Skipping two or three way matching might sometimes occur, or shortcuts might be taken! (How many times have I heard “we create purchase orders after the invoice arrives”?)
A proper process backed by a simple system makes internal controls easier to implement!
4) It’s Ultimately about Having a Real Time Bird’s Eye view on Spending
Controllers and accounting managers, how many times have you been in team meetings where the question is asked:
“So how much did we spend this week?” or
“Why were we over budget this quarter?”
By the time an entry is entered into an accounting system, it’s too late! Insights over spending patterns are missed out on in real time and a course correction can’t be made. There is no real time visibility into spending. By having a proper process and e-procurement tool that facilitates that process, the likelihood of spending surprises decreases significantly!
>>To find out how adopting cloud solutions can improve your accounting practices: To my fellow accountants and finance heads, it’s time to catch up with software led innovation and Cloud Solutions