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October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Establishing P2P and Supplier Strategy
Judy Bicking
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
P2P & O2C Process Consultant & Certification Author/Instructor
a 27‐year veteran of Johnson & Johnson Global AP/P2P Director of Financial Business
Services
Owner of Nautical Retail Store
Chair for SKD’s Financial Committee
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Learning Objectives
Why Establish P2PWhy It’s crucial to convert maverick spend
How to buy smarter How to pay smarter How to qualify suppliers for :
1) value 2) compliance Best practice for on‐boarding suppliers
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Why Establish P2P: Change the organizations
perception• Purchasing: slows down the
process• AP: you “just” pay bills
To be recognized as the professionals we are
To bring value to our organization Make a positive impact to the
bottom‐line How to establish P2P which will:
• Be accepted• Gain results
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
What’s your process?? How does your company pay for expenses
• PO, NonPO, E.R., Check Request, Credit Card, Petty, Cash, Treasury, other
? Define maverick spend? What is your PO to NonPO ratio? Do you have preferred suppliers, especially for
NonPO? How many have a manufacturing plant
• COG’s vs. TCO? Are all your suppliers compliant
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
NonPO: Maverick SpendWhy control Maverick Spend [non “Preferred”]
1. Compliance2. Price, terms, overnight
charges3. Budget control, Pre‐approval4. Cash Management, Visibility5. Timely, Accurate Financial
Statements6. Efficient process
(no paper invoices, no paper checks)
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How to gain Control over Maverick spend?
‐ Need Metrics‐ Where to get the data?
‐ Each Purchase Requisition‐ AP History‐ Budget Forecasts
? Why are these resources rarely used?
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How do you access Vendor Master File (VMF) Data?? Where does your vendor master file reside? AP Purchasing Master File Team
VMF, SMF, Tables, Authorization Levels
? How do you access AP History:‐ AP: By Vendor ‐ Purchasing: ??
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
PROPRIETARY AND CONFIDENTIAL PAGE 9 Slide 9
Example of Commodity Code
This Photo by Unknown Author is licensed under CC BY‐ND
UPC 723175258129 has following Product Name Variations: Aquafina Purified Drinking Water, 16.9 Fl Oz, 24 Pack. Aquafina Purified Water 16.9 Oz Bottles - Pack Of 24.Dec 6, 2018
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
P2P: Procure to Pay \ Process not People Where to start
Current Map Metrics
Start with:? What do you buy? From Whom? At what cost? Vendor Report Card
Develop new process map
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
StudyBest Practices to implement:“e” EVERYTHING: Eliminate Paper
• Vendor portal (+/‐)• Imaging & Workflow• Data Management• Pay methods: B2B… B2C
• Supplier Financing (Factoring)• ACH (debit or credit)• Pcards, Traditional or Commercial
• Virtual Cards• Wires• Paper checks
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Challenge• New Suppliers‐ Send on‐boarding letter to:
• Collect all info (Laws & Regs)• OFAC• 1099 / 1042• Sales & Use Tax (VAT)
• Legal name from Tax ID• Bank Info for ACH – require!
• Existing Suppliers• Audit the file• Back into verifications that are missing
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Welcome Letter• Send to New & Existing Vendors• Written like a Two‐way SLA
• When is a PO required• EFT is required• Where to send the invoice– BP Terms:‐E‐invoice / ePay = Net 30‐Paper inv. & Check = Net 45 or ‐Dynamic Discount
• What else do you need?Where to send the Welcome Letter?
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
• Focus on people… not the process: ‘he said’, ‘she said’• Preferred Suppliers….. Doesn’t mean Mandatory • VMF• Requestors are
–Special, –High turnover, –System is too complicated
• Change Management• Rely on Checks: {Vulnerable to fraud. US: Highest target}• Pcard 2‐3% points• Wires, very expensive
• Not what ‘they’ really wanted
Roadblocks
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Benefits• Perfect Segregation of Duties• Protect the Cash• Gain C‐Suites Support as a Sponsor • Move from overhead to Business Partner• Efficient, Effective, Compliant• Positive impact to the bottom line
• Spend Management * Discount Mgmt.• Soft savings• Budget Control ~ ~ Visibility• Cash Management: under control & compliant• Timely, accurate, compliant FINANCIAL STATEMENTS
NOT just headcountreduction !!!
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Purchasing Matrix
You can use this tool to help the client understand which purchasing method is best; based on the type of
purchase being made.
Item PO P‐card In‐house Expense Report
Books 1
Company Gas Card 1 2
Hotel 1
Flowers 1
Food, Non‐Cafeteria 1 2
Office Supplies 1
Repairs 1 2
A purchasing matrix is a tool to help the requestor choose the correct method of purchasing an item
1 – Preferred Procurement Method 2 – 2nd Preferred Procurement Method3 – 3rd Preferred Procurement Method 4 – Least Preferred Procurement Method
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Q&A
orIOFM BoothJudy Bicking
October 15‐17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Contact Information:Via: Linked‐In Judy Bicking