Technology that enables procurement and finance

Victor Kushch
CTO
Fairmarkit
5-minute read

The procurement and finance departments of your organization are two sides of the same coin. This is especially true in the context of the purchase-to-pay (P2P) process. Yet despite that, in most cases the two departments don’t seem to collaborate as closely as they should.

This isn’t a new problem by any means, but it is one that could have a negative effect on your company’s bottom line. There are many ways to overcome it, including the implementation of new strategies to improve communication between your employees. But one important factor should not be ignored, the how technology can improve the procurement and finance relationship.

Understanding the problem

As a rule, procurement officers usually report to the chief financial officer (CFO). This would imply a strong relationship between the two departments. But even though they both have the company’s best interest in mind, they often fail to see eye-to-eye on certain aspects of the P2P process.

This usually has to do with the fact that they approach things from different perspectives. Whereas the procurement department tends to focus more on the product, the finance department is all about saving and cutting costs. The CFOs will often employ certain financial control measures that might not go down so well with the procurement staff.

How technology can help

This all sounds like a lot of work, but technology can make things a lot easier.Many successful businesses have taken steps to automate the procurement process, starting with automated requests for quote (RFQs) and automated vendor selection. With automation, all the information you need is readily available online. This, in turn, helps make data sharing between departments much easier.

By helping to streamline the procurement process, automation can also help you keep your expenses under control. A good e-procurement platform tracks your tail spend and allows you to identify problem areas that are driving your profits down. It also lets you compare multiple vendors to ensure you get the best possible deal.

As you can see, technology helps you simplify the P2P process and achieve a higher level of transparency between finance and procurement. But to get both departments on the same page, you’ll also need to encourage collaboration and take steps to enhance improve communication and leadership.

To learn more about how you can improve the relationship between your finance and procurement department, check out our new White Paper Series on the CPO and the C-Suite.

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