Unit4 Financials POP/PIM will enable you to understand, control and manage costs to provide improved invoice matching, budgetary control and cash flow forecasting. Six benefits of using an effective Purchase Ordering system:
1: Costs approved before being incurred:
The primary benefit of purchase ordering is expenses/purchases approval before they are incurred. Client will be more easily able to manage budgets, understand costs and proactively run projects. It places the approval process where it should be – at the start of the purchasing process. Maverick spend is eliminated and budget accountability established.
If approval occurs during receipt of the purchase invoice then rather than controlling spend, this process simply tries to account for what has already taken place, when the company is committed and the goods have been despatched. Furthermore, this process is highly inefficient and creates bottlenecks in the Accounts Payable Department, who are forced to serve as corporate watchdogs.
2: Internal control enhancement:
Two critical points of control:
Receiving items or a service against what was ordered. For example the originator of the PO will ‘receive’ acknowledgement of completion of the service. This simple process enables Unit4 Financials to automate cost accruals by identifying unmatched goods received notes (GRN) and posting the itemized accrual to the finance module.
Pricing: Unit4 Financials can maintain historical item costs against individual suppliers so buyer can make an informed judgment. There is also a “Request for Quotation” module within the application. A unique PO number is the key reference number for the document. This becomes the ‘control’ number that links supplier documents: PO, goods received note (GRN) and invoice. The numbers are sequential which adds a level of control to limit abuse.
3: Management of committed costs:
When a purchase order is executed by the buyer and seller it commits both parties to the terms of the document. Committed project costs are those costs committed but not incurred – PO issued but goods not received. Within Unit4 Financials commitment accounting is possible and these costs can be controlled within a unique balance code.
4: Improve project profitability:
A common mistake when managing project profitability is only considering incurred costs (actual invoices received) and this provides only a partial picture. To understand the true profit of a project, committed costs must be included. Expected revenue minus total costs (incurred cost plus committed costs) equals potential profit.
Every organisation wishes to negotiate lower prices with suppliers, but are not always able to do so. Suppliers are more likely to provide negotiated prices or volume discounts when a buyer can illustrate a history of purchasing significant volumes. In manual or semi-automated environments, this information is nearly impossible to assemble and is exceptionally difficult to accomplish when buying is fragmented.
Coda provides complete visibility for all buying activity, arming buyers with information to assist with supplier negotiations. Managers can analyse buying activities by item, category, supplier, location, department, time of year and other user-defined criteria.
Unit4 Financials has a unique single database covering the financial, invoice matching and purchasing modules. This enables the production of complex reports crossing all three modules. Sample reports that can be produced include:
Purchase Invoice Report: Provides an audit trail of the invoice identifying the original purchase order, goods received note and payable document.
Invoice Price Variance Report: Identifies the differences between the Invoice and PO price.
Accrual Reconciliation Report: Reconciles GRNI to accrual account in Financials
Supplier Purchase Summary Report: Identifies number and value of PO’s placed with suppliers and the associated items and account codes.
Supplier Pareto Analysis: Suppliers responsible for 80% of spend.
PO Commitments by Period: Monetary value of PO’s raised not received by period/month.
Overdue Supplier Shipment Report: Overdue PO’s by delivery date, supplier and responsible buyer.
Item Purchase Report: List items in descending order of value purchased annually with associated accounts, depts. and buyers.
Please complete the form below and we will contact you regarding your requirements