Functional Ownership and Organizational Framework – how do you work?

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    • #292338

      Our procurement organization is being asked to manage an increasing number of tasks and we would like to learn whether similar tasks are managed by Procurement, Accounts Payable, End Users, or some other department at other organizations.  Please let us know how your company handles the following scenarios and which department takes ownership.  Thank you!

      1. Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time?  If so, who is responsible to do so (procurement, accounts payable, end user, or other)?

      2. Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers?  Do those buyers reside in Procurement/Sourcing or in the respective business units?

      3. Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system?  (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?)

      4. Who handles billing issues, returns, and credits?  (procurement, accounts payable, end user, other)

    • #294303

      1.Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? If so, who is responsible to do so (procurement, accounts payable, end user, or other)?

      Procurement owns the Open PO process.  POs open for greater than one year are reviewed bi-annually.  (In theory….sometimes there is slippage depending on workloads)  The review identifies the POs that reasonably should be completed, we check with the originator or person currently responsible for the PO internally and get feedback on which POs should be closed.  For any questionable POs, end user and buyer work to resolve with the supplier.  Procurement closes all POs that have been approved for closure. 

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers? Do those buyers reside in Procurement/Sourcing or in the respective business units?

      All employees have access to creating requisitions in our system.  There are some complex services contracts where the buyer in Procurement will create the requisition on behalf of the end user.    Only Procurement Buyers can create a PO from an approved requisition.  (role based segregation of duties / SOX control)

      3.Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?)

      Varies by PO and requestor.  Some are sent directly by the Procurement Buyer who created the PO.  Other times the Buyer forwards a PDF copy of the PO to the requisitioner and they send to the supplier…this usually occurs for complex services POs.

      4.Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other)

      Billing issues:  start with AP, buyer may get involved if help is needed

      Returns:  Buyer and Shipping/Receiving

      Credits:  start with AP, buyer may get involved if help is needed

       

    • #294304

      1.Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? If so, who is responsible to do so (procurement, accounts payable, end user, or other)?  We use a 3rd party who supports both procurement and A/P.  

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers? Yes but moving to a new P2P system in Q3 2019 so not pushing heavily now.  Will re-educate closer to go live of new system  Do those buyers reside in Procurement/Sourcing or in the respective business units?  The business submits requests, and the procurement team or 3rd party supporting Procurement will validate and submit the final PO’s.

      3.Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?)  Third party company supporting Procurement Operations.

      4.Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other)  Third party supporting A/P.  Escalations would go to A/P full time employees.

       

    • #294305

      1.Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? If so, who is responsible to do so (procurement, accounts payable, end user, or other)? Accounts Payable manages communications with employees/requestors about PO and invoice transactions.  I wouldn’t describe it as proactive as much as reactive to employee inquiries to the help desk.  Our help desk, buyers, and Accounts Payable are within the Procurement organization.  

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers? Do those buyers reside in Procurement/Sourcing or in the respective business units?  Employees submit their own requisitions in our P2P system.  We are exploring a model where all purchasing would go through a buy desk and only a few buyers (within Procurement/Sourcing) would enter requisitions.  Our main reasons for changing the model would be to eliminate non-value-add activity for employees, and to improve spend management (upstream oversight and influence over the lower risk but high volume purchases).  We also think this would improve the classification of the purchase on the front end to improve our data spend analytics downstream.  

      3.Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?)  POs are automatically sent by the P2P system to the supplier email address on record.  Requests for POs to be resent are handled by buyers in Procurement/Sourcing.  

      4.Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other)  All billing inquiries, supplier debits and credits, and payment processing occurs in Accounts Payable.  

       

    • #294306

      1.Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? Yes If so, who is responsible to do so (procurement, accounts payable, end user, or other)? Procurement is responsible for handling aged payables and open PO’s. 

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers? Do those buyers reside in Procurement/Sourcing or in the respective business units?

      3.Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? Procurement is responsible for sending the purchase orders to the vendors. (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?)

      4.Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other) The person who cut the purchase order usually handles all issues until the PO is closed and invoice is paid.

       

    • #294307

      1. Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? If so, who is responsible to do so (procurement, accounts payable, end user, or other)?  Ultimately Procurement Department should take ownership of the Procure-to-Pay process which includes supplier management and engaging A/P to close the loop on invoicing and payment opportunities/issues. P2P Metrics should include Open PO’s, Invoices on Hold and PO’s Open Not Invoiced.  

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers? Do those buyers reside in Procurement/Sourcing or in the respective business units? Respectfully, kind of a dumb question! Organizations should have policies, processes and systems in place to support Procurement expenditures especially to thwart “Maverick Spend” and fraud (e.g., once found out one of my Buyers was sending PO’s to her husband). | Having Buyers in a strategic/tactical corporate position or having tactical/operational position in the Business Unit is purely based upon what works for the business. 

      3. Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?)  Ideally the P2P System or Procurement Department should compensate the Buy/Sell deal. There will always be exceptions but those exceptions should not be the rule.

      4. Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other)   See initial response.

       

    • #294308

      1.Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? Yes.  If so, who is responsible to do so (procurement, accounts payable, end user, or other)?  Procurement

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions Yes or are requisitions created only by relatively few buyers? By select requisitioners in the business units. Do those buyers reside in Procurement/Sourcing or in the respective business units?

      3.Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?) Buyer within Procurement 

      4.Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other)  Accounts Payable

       

    • #294309

      1.Does your company proactively request invoices or seek resolution on purchase orders that remain open for an extended period of time? If so, who is responsible to do so (procurement, accounts payable, end user, or other)? Procurement is not involved in with this so maybe AP if needed. We have a 3 to 3 match. Sometimes when multiple invoices are involved on a project, procurement and sourcing steps in to make sure payment is flowing.

      2.Does your company encourage wide-spread use of your Procure-to-Pay system to create requisitions or are requisitions created only by relatively few buyers? Do those buyers reside in Procurement/Sourcing or in the respective business units? – We have “power users” who consist of admin and business unit locations. However, anyone can do a request as long as they have a profile set up.

      3.Who sends purchase orders to suppliers if they are not automatically sent by the Procure-to-Pay system? (Are they sent by a buyer within Procurement/Sourcing, a buyer in the respective business unit, the requisitioner, or other?) – A Buyer in our Procurement department will issue the PO 

      4.Who handles billing issues, returns, and credits? (procurement, accounts payable, end user, other) – procurement is involved if we need to edit the PO / all other issues work with accounts payables

       

    • #294310

      1. Procurement is responsible for following up and closing all Purchase Orders.

      2. We use the P2P system for creating PO’s

      3. The system sends out the PO’s

      4. Procurement handles issues relating to the PO.

    • #294311

      1. Yes – can be followed up from a number of areas: Procurement, Finance, AP

      2. Yes, wide spread use throughout business units.

      3. Auto sent by P2P system

      4. AP

    • #294312

      1. No, it is all through the payment portal,  if we need the invoice resolution, depends on the complication of the invoices and PO s, usually procurement helps the account team to sort it out faster. 

      2. Not really , we receive most of the requests by email, only some of them goes through the system (SAP modules)

      3. They are automatically but in some cases the buyer in procurement send it to the supplier as well. 

      4. Accounts payable and procurement

    • #294313

      1. Accounts payable is responsible with support from procurement or the end user depending on the issue that has to be resolved and the expertise required to resolve it.

      2. Requisitions are not created by buyers. Buyers issue orders based on requisitions created by internal requesters. Requesters are with the business units and buyers are with Procurement. All happens through Procure-to-Pay system 

      3. Automatically sent by the Procure-to-Pay system

      4. Accounts payable

       

    • #294314

      1. Accrual accounting requires companies to record transactions in the time period in which the benefit was received.  Best practice is to reconcile open POs within the reporting period.  The procurement system should be the source for this information, but actioned by FP&A and the business.

      2. P2P should by their nature by self-service and accessible by all.  Some companies attempt to control who can create a purch req, but in my opinion this creates a bottleneck or inefficiencies.  The P2P system should be available to all.  Having said that however you will find a core or super user group evolves that is responsible for 80 to  90% of the purch req activity.

      Purch req creators should reside in the business alongside the business they support.  Putting them in Procurement creates a SOX/MAR segregation of duties concern.  Granted the purch req can still route to the business for spend approval, but it tends to raise concern around the potential for fraudulent purch req activity if the purch req creators sits in Procurement.

      3. Here again for SOX/MAR segregation of duties Procurement should be responsible for sending contractual documents – purchase orders to suppliers.

      4. Depends….  Do you have a global P2P process owner?  If not the common thread is likely the CFO or a S/VP finance ops, which is too high.  I’ve seen billing and credit issues handled by A/P with returns managed by Procurement.  Returns should be managed jointly by Procurement and A/P based of the invoice, credit memo, RMA and other related documents that need to be processed and accounted for.

    • #294315

      Please take in account that I am a solution provider and not a user.

      Q1

      Blanket P.O. is a standard feature or P2P solution. It is easy to seek resolution and as far as I know, it is a Procurement job.

      Q2

      Wide spread of P2P is the main rule. Business/ed user manage their PR. It is up to management to approve and Procurement to intervene based on amount or categorie. 

      Q3

      PO are sent by the P2P. If not I have seen AP doing that.

      Q4

      AP

       

      Patrick Chabannes

      +33 (0)6 59 01 46 75

      [email protected]

    • #294316

      1. Procurement does not actively seek or require invoices, however, we do look at outstanding POs that have been left open for 3+ months to see why. We do not leave them open indefinitely. Basically we check to see if the invoice was paid by some other means? (e.g. Credit Card). Or, did they slip through some other payment method (sometimes the PO # is not referenced on the invoice and it gets paid via check).  Within PeopleSoft we schedule an OPEN PO report weekly to monitor these.  There are times that, due to S&P involvement, a copy of the invoice is emailed to procurement along with the business unit ultimately responsible for reviewing it.   If it is an invoice tied to a PO, we email that invoice to the person within A/P who is responsible for the PO process and the 3-way match. 

      2. We are going to a P2P system, however, are not there yet…. A work in progress.

      3. Currently, our Sourcing Specialists send PO’s directly to the supplier. They are sent via email immediately after dispatch. 

      4. Collaborative effort. We work together to solve these as they occur. 

    • #294317

      1)In the case of a discrepant invoice (match exception), AP logs the ME and assigns it to the responsible party (e.g., Purchasing if the price invoiced doesn’t match the PO, Receiving if the goods receipt hasn’t been posted). In the case where an invoice simply hasn’t been received, however, there usually isn’t proactive follow up. If there is, it is undertaken by AP. I’ve also seen it initiated by the Corporate Finance team (e.g., when reviewing budget with department, Finance shows the $ as not spent and wants to reclaim it, but dept confirms service was performed), but even if initiated in this matter, it is brought to AP’s attention to request invoice from the vendor.

      2)Whether requisitioning is enabled in P2P system or separately hosted, my experience has been that the business units enter their own requisitions and they are approved through that department hierarchy (sometimes with a finance or accounting dept review to ensure they are written against the correct accounts) based on spend level, then they come to Purchasing/Procurement for PO issuance.

      3)If PO’s are not automatically sent, the Procurement Buyer would send to the vendor.

      4)AP handles these issues.

       

    • #294318

      1. No, we don’t proactively request invoices. If the supplier does not bill, it is their responsibility, unless we are trying to close out books for a year end exercise or something of that nature. AP can also follow up with the business to check the status of the purchase before contacting the supplier. They would usually go onto an Ageing Payables report to be followed up on before year end close. 

      2. Our company currently has widespread use, but we are trying to consolidate the number down to a smaller subset of user to reduce the amount of people to train to streamline the workflow.

      3. as a rule of thumb, it is the buyers in procurement that send the PO, but it  can be done by the requisitioner as well if necessary

      4. billing issues can be handled by accounts payable, the end user, Supplier management, or procurement. Usually it is a combination of supplier management and the end user, and procurement does not get involved

    • #294319

      1. Yes, we run accrual reports twice a month and the buyers request invoices from suppliers if they are missing.  Procurement has this responsibility to ensure purchase orders do not remain open for an extended period.

      2. Requisitions are created by our storekeepers in each location.  The requisitions go to the procurement department to be sourced with suppliers.  All buyers are in the procurement department and this is a very small # of employees.

      3. All purchase orders are send by the buyers in procurement.  We have recently started using EDI to send po’s.

      4. All of these issues are handled by procurement.

    • #294320

      1.Generally speaking this depends on the company’s policy / process. Yes, we proactively reach out. We also reach out to suppliers and short close the PO depending on the case. In the cases, we have dealt with, Procurement team and / or AP does this. 

      2.Yes, we encourage the use of a Procure – to – Pay system. Many times, clients request us to leverage their existing PTP system and incase, they don’t have any, we propose one. 

      a.The requisitions are typically created by business / end users. And

      b.The buyers in Procurement function will process the PR to PO. 

      3.Procurement buyers will send the PO to supplier, incase the automatic transmission fails. 

      4.Billing issues are managed by Accounts Payable and escalation handled by Procurement. 

      a.Return process is as per the client’s process. Typically, it is initiated by the end user and procurement coordinates for the return. 

       

      Let me know if you have any questions. 

       

      Thanks,

       

      Asheesh Tiwari

      Senior Vice President – H&LS

      WNS Global

      15 Exchange Place, Suite 310, 

      Jersey City, NJ 07302

      [email protected]

       

    • #294321

      1. Yes, Procurement does so. If the process can be automated by having a periodic report from the ERP on the open POs, it will save manual monitoring.

      2. We have designated indenters from respective Business Units who can raise requests. They are also the ones who are the custodian or Asset owners who act as SME and raise requests after internal inventory assessment.

      3. This can be customised as per need. At regional levels, Purchasing team does that activity. But it can be passed on to Business unit for related action.

      4. Typically AP team with the help from Procurement. Procurement has to take the lead on vendor interaction and closures.

    • #294339

      1. Yes we do.  We monitor open PO’s for GR and payable issues.  Procurement is generally the front line and AP provides a secondary check in

      2. Yes, we use Coupa tied into our SAP platform.  Buyers must gain approval from the operational managers to get access.  Procurement is the funnel but we do allows folks outside of Procurement to buy.  Each buyer is given self-approval up to $500/order, anything above that goes through our standard COA

      3. Sent via Coupa as CXML

      4. Primarily Procurement with help from AP

       

    • #294340

      1. If the vendor is not invoicing we don’t chase them to invoice, we (procurement) simply close the PO line items. and controllers reduce the pending liability in their accrual calculations.

      2. We have a multi-channel procurement system (like 9 channels) that is used one of them is the P-2-P system which is the most expensive and time consuming. We exclude certain purchases from the P-2-P system and channel them through the other channels like Ariba, P-cards, T&E cards, or direct invoice. Requisitions are created by a number of requisitionors who spread throughout the business and are usually from the business line and not from procurement. Buyers as opposed to (requisitionors) mainly are embedded in the operations organization locations (with direct reporting line to function) with the exception of some high value strategic buyers (we call them commodity managers) who sits in thecorporate office. 

      3. It is the buyer who created the PO and have access to print the PO.

      4. In theory, it is the end user who owns the relationship with the supplier, procurement is usually brought in when things go south and the vendor is not paid and threatening to discontinue the services or deliveries until payment is made. At best, I would call it a joint responsibility by everyone in the buying organization to get the vendor paid in time.

       

      Also, in general, it would be a great collaborative exercise to get the three stakeholders (Business, CFO Office, and Procurement) to agree on an outline of Responsibility Assignment Matrix at the begining, particularly when you are creating the function and designing the interface. This would allow different departments to express their needs to control or not control certain aspects and the resource required to do it and the corporate controls required and the levels. 

       

    • #294342

      1. Currently AP manages the invoice processing 

      2. Yes, P2P system is widely used by business users to create purchase requisitions, we use P2P solution to complete all required approvals then, have a few buyers (in Procurement) to validate the PR and make sure all necessary information are correct before sending a PO to a supplier 

      3. Our PO is automatically generated and they are sent via P2P system

      4. Requisitioners decide return, procurement assist AP to resolve billing issues.

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