Better collaboration needed between procurement and finance

News Article - 22 May 2012
Category: Business

Whilst procurement and finance departments ideally share a close working relationship, procurement officers at a recent public sector debate agreed that these departments do not always co-function harmoniously. In the post-recession climate, closer collaboration is required to reduce spending and help tackle the country's spiralling budget deficit.

Financial compliance - a necessity in any business - can be streamlined with better integration between these key departments. With the Government planning to require increased spending visibility on public sector transactions, as low as £500 for local authorities, new layers of compliance will need to be addressed. Without careful integration with the finance function, procurement departments may find it difficult to meet new regulations whilst remaining efficient.

A closer working relationship would also allow better use of budgeting to encourage spending efficiency. Many procurement officers feel the best results are achieved when budgets are scaled against a department or organisation's ability to do more with less. A more collaborative relationship with finance will ensure financial innovations both reflect this need to save and consider relative efficiency and effectiveness as well as raw cost.

In addition, an increase in supplier-led litigation on the grounds of 'unfair dismissal' has made transparent buying processes a priority. Procurement departments will need greater input from finance and legal teams in order to set up competitive contract tenders that fully comply with EC legal frameworks, reducing the chance of litigation when the contract is terminated.

Whilst the spotlight is on public sector bodies because of the budget deficit, private companies can also benefit from streamlining their procurement processes. With cashflow more restricted in the post-recession climate, close alignment with the finance function is essential to ensure purchasing is kept under control at all times.

An online software solution can facilitate integration between procurement and finance. Access' e-procurement and supplier management functionality allows you to negotiate terms with suppliers, retain control over budgets and handle sub-contractors with speed and accuracy. And the authorisation workflow makes sure all purchases go through a pre-defined approval process before they enter the invoice register. This benefits all concerned and helps to keep cashflow under control - an important task in the current economic climate.

For more information, please call Access on 0845 345 3300.

Article keywords: Procurement and finance, business news, industry news, business software, accounting solutions, accountancy, business techonology, accounting software

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