How to keep pace with procurement legislation
Read Canon's guide to making your business transparent, accountable and secure
The rapid pace of change impacting modern finance departments is seeing innovation, such as automation and artificial intelligence, enter a traditionally analogue business unit. Coupled with a shifting regulatory landscape, maintaining compliance in line with technology innovation can represent a challenge as businesses look to increase the pace of digital change.
In the finance world, compliance has traditionally focused on internal policy and prescribed processes, with businesses putting pragmatic controls in place to ensure that spending decisions are in the best interest of their organisation. Today however, there are an increasing number of external influences that present further regulatory compliance considerations. Whether it’s the recent introduction of the General Data Protection Regulation (GDPR), or other laws on bribery, modern slavery or the duty to report payment terms, there are a growing number of compliance considerations that procurement and finance departments need to consider.
The challenge for finance teams everywhere is that new, digital legislative changes like GDPR have been introduced into a working environment which still frequently relies on traditional, paper-based methods of workflows. In fact, 66%[1] of finance professionals say they are more paper-reliant than any other business function.
But whether a finance department is fully automated or falling behind the digital transformation curve, the efficient procurement of goods and services is integral to the running of any business. As such, legislative compliance cannot, and should not, hinder the process. It should simply safeguard the way procurement is carried out, adding robustness to the process and ensuring security for all parties involved.
Modern-day procurement is clearly no simple matter. However, the principal of effective purchasing can be distilled in to a three-stage process. Acting as a way for the accounts payable or finance teams to ensure that a payment is complete and accurate, this process scrutinises three important documents involved in the purchasing process and represents the total chain of accountability, highlighting any discrepancies, in order to save businesses from overspending or paying for nondelivered items or services.
The process of three-way invoice matching is simply matching information in a purchase order (PO), a goods received note (GRN), and an invoice. Done manually, it can be quite a lengthy process, which is why many businesses choose to automate the process to reduce administration time in accounts payable and provide valuable insights into supplier delivery and pricing compliance.
For many organisations, achieving compliance with industry legislation is about more than just ticking a box. It represents a robustness of process that’s essential to efficiency. Introducing digital and process automation technologies can make the procurement process not just more efficient and transparent, but also more accountable and secure.
Regulatory compliance should be a trigger to better decision making across the procurement process and with the Chartered Institute of Procurement and Supply stating that organisations can spend more than two-thirds of revenue on procurement, even small improvements to the process can have a big impact on the entire business, not just the finance department.
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