Getting the right balance for purchasing responsibilities within your organization can be really tough.
If you hand too much control to a single person, routing all purchase requisitions through them, they can easily become a bottleneck. If you opt to build out a dedicated purchasing department, it might take the strain, but it will definitely eat into your operating budget. And if you allow employees to send Purchase Orders willy nilly, well, that’s when things get messy.
How can your business achieve balance? How can you retain control over key purchasing decisions, without spending too much time and/or money?
Well, lucky for you, this is what we’ll be looking at in this blog post.
A task shared is not always a task halved
For most SMEs, the idea of a dedicated purchasing department is a pipe dream. Instead, responsibility must be deferred to your employees, allowing them to raise Purchase Orders (PO) themselves.
And this invariably leads to the following:
1. Employees asking for access to your accounting platform.
Admit it, your heart just jumped into your throat. If this seems unreasonable, and not entirely secure, it’s because it is. By allowing them access, you might be letting them view sensitive accounting information that is well above their paygrade.
2. The need for an effective approval system.
Relying on email approvals can become rather messy, rather quickly, and they’re certainly not good for audit trails.
And while approving directly in an accounting system can be effective, it often does not offer the feature of multi-step approval, therefore making delegation of responsibilities difficult.
These problems are just the tip of the iceberg, and they can and will prevent you from implementing a smooth, employee-driven purchasing process.
Keep those PO requesters at bay
It might seem obvious, but the single most effective solution to implementing a clean and constructive approval process is to keep PO requesters out of your accounting system.
So, imagine a platform that effortlessly interfaces with Xero, allows POs to be created directly within it, and keeps sensitive accounting data safe and secure. Sounds good, right?
Just think, instead of your employees accessing Xero, all they would see is the necessary information required to raise a PO: inventory items, tracking categories, etc.
And what if you could set limits on what requesters can order? It could be by supplier, inventory items, accounts, or tracking codes.
All of this would equate to even more control over purchasing matters.
Transparent. Safe. Approved.
Well, having listened intently to the feedback of Xero customers, we have transformed employee-driven purchasing into a safe and transparent process thanks to our financial workflow system, ApprovalMax.
You no longer need to imagine a platform that interfaces with Xero, allows the creation of POs within it, and keeps employees from having a nosy around sensitive data. It’s very much real.
And thanks to its seamless automation, once a PO is created in ApprovalMax, it can be routed to the appropriate manager for approval. These approvers can be selected based upon specific criteria, such as amount or supplier, while a multi-step workflow can allow approval levels to be defined – for instance, POs above 10k USD should be approved by the CFO.
The best bit? Approvers can approve POs with a single click from an email or mobile app.
Now, all that remains is the matching of incoming bills against POs when going through approval, ensuring the company is paying for the goods and services they actually ordered.
But that’s another blog post for another time.
Author: Helmut Heptner, is Chief Operating Officer at ApprovalMax
The post How to achieve transparent and secure employee-driven purchasing appeared first on Xero Blog.