Getting accounts payable and purchasing in sync.

Tehseen Ali, President and CEO of Verian Technologies, offers the following tips for improving the linkage between purchasing and accounts payables (AP) departments:

* Implement a "no PO, no pay" policy. Insisting on purchase orders (POs) may not be immediately practical in every organization, but those that have adopted it have been able to reap tremendous benefits in AP and in purchasing.

* Never let purchase order issuers access your invoice processing screens. Never means absolutely, unequivocally never. The risk of doing so, of course, is that someone in purchasing could approve an invoice and/or initiate payment for a purchase that he or she originated and received.

* Purchasing managers must accept responsibility for purchase orders being correct and complete. A strong purchase-to-pay process demands a strong culture of accountability. Because most invoice errors can be traced back to incorrect or missing data on the purchase order, the purchasing manager must be held accountable by his or her supervisor and AP for purchase order data being correct.

* AP should not deal with pricing or receiving discrepancy resolution. It should be policy that the requisitioner, PO issuer and the person who receives items should be responsible for sorting out invoice discrepancies--AP should not be responsible for tracking down the facts.

* AP should collect all questions for purchasing in a file handed over at day's end. This idea works best in a centralized environment, but can modified for a decentralized organization as well, using document-imaging technology. There should be an agreement that purchasing should have answers back to AP by the end of the next day--a 24-hour turnaround.

* AP should always tell purchasing if it is going to hold off on payments beyond agreed-upon terms. AP may not always be sensitive to the status of vendor relationships. If a payment is going to be late, purchasing may need to step in and personally let the vendor know as a professional courtesy or for "damage control" reasons.

* AP should provide purchasing with reports by vendor and expense category (and line-item, if possible) of non-PO invoices, reimbursables and P-card purchases. Purchasing needs to know who in the company is engaged in "maverick spending," outside of vendor contracts. Identifying and addressing this behavior can add real dollars to the bottom line.

* Consider using a purchase-to-pay system. As part of an overall strategy to strengthen the purchase-to-pay process, software is a vital tool. Most financial systems offer inadequate, incomplete or very difficult to use purchase-to-pay functionality. Look for "best-of-breed" systems that collect all spending data in a single database that can integrate easily with your financial system.