Regardless of whichever organisational function leads the P2P/S2C digitalisation, everyone involved in the process expects their yields. Procurement and finance teams naturally play critical roles in such transformations.
The procurement team will be seeking:
- improved supplier consolidation, category consolidation, accuracy of spend reporting;
- reduced cycle time in supplier management processes and elimination of manual tasks;
- increased supplier compliance.
The finance team typically aims to:
- avoid late payment;
- reduce the fraud risk associated with bank details and the satisfaction of SOX compliance requirements when editing such information;
- improve PO compliance and invoice matching.
The above benefits cannot be achieved without complete and accurate master data in three primary domains:
- Supplier identification and tax information;
- Supplier contact details;
- Supplier payment details.
Supplier identification and tax information
Includes:
- Supplier’s legal name
- VAT number
- Business register number (company register number in the UK)
- Legal address
- Country of registration, state (where required to identify the register)
- Tax code where required (unique tax reference in the UK)
At least two of the first four data elements are required to be verifiable in order to identify a legal entity. This ability is vital for data cleansing and consolidation, but also has its business case:
For the procurement team, the ability to identify the legal entity accurately in every line of the vendor file allows:
- finding supplier families, consolidating categories, thereby increasing purchasing power;
- extracting information from external databases for checking supplier compliance;
- enabling RPA and advanced solutions such as e-sourcing and e-invoicing.
For the finance team, the ability to operate with the up-to-date supplier name, VAT and tax information is beneficial for:
- invoice matching – vital if the new system is intended to automate these operations;
- reducing the risks of fraud and incorrect payments.
Supplier contact details
Includes:
- Email address and phone number for communication
- Email address and phone number for purchasing
- Email address for remittance advice
Reliable communication with all suppliers is essential during P2P transformation, but it also has a strong business case:
For the procurement team:
- ensuring that purchase orders are received at the time by the appropriate people. A visually correct but no longer valid email address may cause delayed acknowledgements or even misrouted/lost purchase orders;
- ensuring that the supplier provides updated compliance documentation (such as licences and insurances) at the right time in order to avoid waiting and chasing the supplier over the phone which might drastically affect the cycle time.
For the finance team: the ability to communicate with a supplier using reliable contact details prevents delayed payments and remittance advice.
Supplier payment details
Includes:
- Basic Bank Account Number and Sort Code / Routing number
- International Bank Account Number (IBAN)
- BIC/SWIFT code
- Country of bank account
- Currency
If currently used for paying suppliers manually, the bank details stored in the legacy system will have issues with formats, consistency, and completeness. The complaint process, that is required in order to verify and add or edit bank details to a valid format is time-consuming and uses many resources. If the number of suppliers with such data issues is significant, the entire digital transformation project can be jeopardised, and serious risks can be created for the business. Therefore, from the first day of the data cleansing project, the greatest effort should focus on bank details. The business case for this is presented as follows:
For the procurement team:
- prioritising bank account issues prevents supplier evaluation and onboarding routine from becoming stuck after go-live due to the massive number of incoming bank accounts’ verification for existing suppliers who might require payment soon after the go-live day.
For the finance team:
- the ability to pay any supplier instantly from the new system (not waiting until bank accounts are [re-]verified and entered), thereby supporting the avoidance of late payments;
- properly applied auditable and compliant verification process supports fraud risk reduction.
Datanovel helps with gaining insights to supplier data sufficient for winning stakeholders’ approvals and building requirement specification for new processes and systems. Please enquire us for:
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