In this exclusive guest blog from Wax Digital’s Finance Director Andrew Finn, he reveals from his extensive experience how to best perfect the art of harmonising collaboration between finance and procurement teams.
I have worked in finance for over 20 years now in industries ranging from services to international manufacturing and of course software. An issue I see arise time and time again is a battle between purchasing and finance teams in reaching methods of collaboration which offer benefits for both departments and in turn benefit the organisation as a whole.
In many organisations the purchasing team simply reports into finance and view the finance team as restrictive, and bearers of red tape, but this should not be the case.
Procurement and finance share common goals, including the need to achieve rapid savings and the need to monitor and control external risk factors. It seems obvious that the two teams should work closely, adhering to combined objectives that have been set up to work cross-functionally, with the finance director initiating and building upon the relationship with procurement.
One method I have seen work in practice is to get the two teams to ‘sit in’ on the other department to get to grips with and understand how that function works and realise the problems they face.This can be an eye-opening process and one which creates a better understanding between the two functions of what each actually does and how it works on a day to day basis.
Where the two departments often clash is when it comes to technology. With the rise in the last decade of eProcurement technology offering an increased range of functionality also covering finance processes, legacy finance systems have taken a back-seat to new eProcurement technologies which enable procurement and finance teams to work better together.
To enable this to happen however, it is essential that finance takes the lead in ensuring the seamless integration with existing systems and the integrity as expected with any finance and procurement system.
Utilising new software can be a difficult transition for many teams and the process needs to be approached pragmatically. Before embarking on a transformation such as this it is essential that Procurement and Finance work together in getting all departments on-board and highlight the benefits of the new technology in terms cost savings across all departments but also promote the usability and efficiency aspect.
With both procurement and finance working together early on in the project as a joint initiative, the project is likely to run much smoother further down the line as there will be a common ownership of the system.
The key to creating and maintaining a successful procurement-finance relationship ultimately comes down to communication. Understand how the other team works and be open to new ideas and suggestions, work together on combined objectives and methods for achieving these collectively and you’ll soon start to see the benefits of harmonising the two functions.