Financial collaboration - in theory but not yet in practice

Financial collaboration and harmony between procurement and finance, for the majority of companies, seems to be a worthy but still unattainable goal.

Speaking to the market, we have found that better collaboration is something that companies strive for but there are a series of common issues which hold them back.

1. Differing departmental targets and misaligned goals are barriers to co-operation
2. Even in companies where collaboration is active, their goals are restricted by siloed processes and technologies
3. Finance and procurement collaboration is hard to define in organisations where there is no procurement function and purchasing is conducted by employees throughout the business

When it comes to opportunities such as finance and procurement’s ability to meet early payment discounts, work more closely with suppliers, and take advantage of dynamic discounts, there’s still a large bridge to cross before achieving that level of collaboration. For many the three issues highlighted above are real barriers.

What can be done?

By automating financial processes and implementing procurement solutions that appeal to both specialist and non-specialist buyers alike, companies can start the journey to improved collaboration.

Here are some of the key areas where differences may be seen:

• Finance collaborate and work more effectively when they’re not caught up in a paper trail and are no longer chasing internal approvers or dealing with supplier queries
• Buyers, regardless of where they are placed within the organisation, need effective and easy to use procurement tools if the company is going to capture all spend and increase compliance. This is particularly important for organisations which don’t have a procurement function or specialist buyers in place
• Unified reporting and having a holistic view of purchase to pay allows finance and procurement and other business units to determine KPIs relevant to their targets, whilst incorporating cross-function and universal goals
• You can’t rationalise suppliers and implement spend reduction projects without first getting the full picture of your supplier and spend performance from finance
• Procurement can only have the confidence to negotiate better/flexible terms if they know Accounts Payable can meet them and mutually beneficial terms can’t be set unless there is visibility and shared objectives between the teams

Regardless of the challenges there is tangible value in aligning finance and procurement. By sharing access to information, setting objectives in partnership and aligning systems and processes, every organisation regardless of the size or shape of its procurement function can take control of spend.