What is the best practice for mature organizations regarding "Goods Receipt" for indirect procurement (goods &/or Services), and whether it differs for non-mature organizations? Some articles state a shift from 3 way match to a 2 way match to streamline the process and avoid training employees on GR. Is this truly the optimal scenario? Any recommendations?
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Director of Supply Chain in Transportation6 months ago
We are currently reviewing but only for lower level PO's under £500. We also implemented self approvals on these recently to speed up those smaller purchases. Director, Procurement - Risk management, operations and projects in Finance (non-banking)6 months ago
In the indirect world, invoice and PO match is not sufficient as actual delivery of service/goods needs to be verified with the requisitioner. Service may be delivered, but was it to the expected quality as stated in the contract? That is a key factor that can only be determined by the requestor/requisitioner.From a system perspective, this can be handled in various ways;
Mandate a three-way match - not perfect as processes may need to be customized
Require invoices to be approved by the requestor. One way to ensure services are verified is by the use of project codes of GL sub-ledgers where the requestor is at the start of the approval process.
The base need aligns of verification and approval of goods/services exist for both mature and non-mature organizations, however, it depends on the priority Finance/procurement sets.
Sustainable Supply Chain Adviser in Healthcare and Biotech6 months ago
I'd stick to 3-way match. Frankly speaking, if anyone procures services (anything indirect), then they have to be aware of how it can be verified that the service was up to the expectations before approving a PO and invoice.If this process isn't clear, it may result in unintended bribery or failed delivery (literally where the buyer is clueless about what they bought), or it may result in reckless spending (if the buyer knows what he/she is doing...that's worse than the first part).
I always ask every indirect buyer to specify with the functional counterparts of the business, what the acceptance criteria are before even raising a PO or accepting an invoice.
Director of Operations and General Counsel in Manufacturing6 months ago
I can completely understand the desire for a 2-way match, but in alignment with some of my peers here, I think you should carefully consider the risks: quality of goods/services received, ensuring the right quantity of goods/services are received, and potentially even avoiding outright fraud (internal or external). For me, it's always a question of risk. Based on a careful analysis of the potential risks, can you afford to make the change? Can you put systems in place to review the effectiveness in case you need to pivot later?