Striking the right balance

Today, perhaps my most talented procurement employee came to my office.

“Can we talk?” he asked? I could tell something was weighing on his mind, so I invited him to take a seat.

He spread in front of me a thick stack of papers and talked through a long and tangled story of our accounts payable department.

It’s and old song about an invoice that should be paid in full but was instead short paid, a $300 credit due was applied to more than one invoice, seemingly willy nilly fashion, and no one will take accountability for fixing it.

My employee, and MBA procurement person, said, “I’m not a finance person, but I’ve now spent several hours investigating this issue. Who do I have to speak to now?”

And it was then that I had that managerial pang that lets me know I’m about to fail my valued and trusted employee.

See, in the evolution of this corporation, there was no procurement department for a long, long time. When it was actually discovered that there needed to be a formalized procurement department, it was bolted on as part of the Finance organization, utilizing accounting and finance people in their spare time.

The department has since evolved quite a bit from there, but those roots as a part of finance still run deep.

My buyers are only part-time buyers. They are also part time finance personnel, trouble-shooters and occasionally check runner downers.

This makes me nuts. I’m a procurement guy. I’m old school, negotiate the contract, get the art of the deal right, cut the PO and be done! Someone else pays the bills!

But, as they say, you can’t fight city hall…and you can’t fight the ingrained culture of an organization.

We ultimately talked through the issue, I provided some suggestions, and sent him back out into the cold, callous world of both sides of the purchase to pay equation.

Purchase to Pay means both purchase and pay. And our senior leadership has made it clear that both procurement and finance own making sure both sides of that happen fast, efficient and correct on behalf of our end users.

Having a procurement department overrun by finance is tough to manage. Having an organization too overpowered by the needs of procurement without thought about how suppliers get paid is also not so good.

Striking that right balance is key. I can say, right now, we don’t have it. But we keep trying.