@Risk

I’ve posted before about the critical need for CFOs to recognize that supply chain operations are integral to risk and fundamental to both bottom line performance and cost savings goals.

Now, Dr. Matthew Lees, UK Country Manager, Basware, has artfully outlined three specific steps that procurement and finance can take together to enhance risk management. According to Lees, these steps include:

Empowering accounts payable
Lees says invoice automation is a key factor here. Invoice automation creates benchmarks and baseline data that can be tracked and shared both internally and externally. As a result, suppliers can keep in touch with the payment process and gain insights that can strengthen that all-important collaborative relationship between suppliers and buyers.

Empowering internal auditors
Internal audit groups need to analyze the payables process and supply/supplier risk. Lees suggests that procurement and finance departments can assist auditors in this process by working together to provide a purchase-to-pay platform that enables persistent monitoring of buying controls. In addition, auditors can keep their eye on risks from non-compliance, fraud, security, privacy, etc.

Performance indicators
Relying exclusively on lagging third-party indicators (supplier credit data, e.g.) is a mistake in today’s changeable business environment, Lees says. Instead, he urges companies to use a variety of performance indicators from different systems with a specific focus on purchase-to-pay and payables data.

You can read Lees’ post in full here, at Director of Finance online .