Create an Auditable Record of Spend
In this final article of the ‘What is your Strategy to Improve Profitability?’ series, we look at how creating an auditable record of spend delivers cash savings to the bottom line, as well as generating non-cash releasing efficiency gains.
Organisations with good visibility of spend can better identify savings opportunities, better enforce contract compliance, and better comply with regulatory and financial reporting requirements with a complete auditable record of their spend.
- Management oversight: Spend visibility enables managers and executives to oversee spending and ensure policies and procedures are being adhered to by both buyers and suppliers
- Process compliance: To maintain financial control it is necessary to ensure Purchase Orders are being completed, spending is conducted off-contract and purchases are processed correctly etc.
- Audit recovery: Savings and audit recovery opportunities exist if organisations can compare actual prices agreed in transactions to negotiated contract terms
- Audit charges: Auditors need to assess financial information, which can be extremely time consuming and costly if the records are difficult to access
- Legal cost reductions: It’s possible to achieve material legal cost savings by having greater visibility of purchase-to-pay and other related information
- Regulatory and shareholder scrutiny: By creating auditable trails of buying and payment activity, organisations are more likely to stand up to current and future regulatory and shareholder scrutiny