In these uncertain times, it is important that organisations are confident in their cash flow forecasts, identifying cash savings, assessing the supply chain, as well as confirming that everything is being done to maximise the use of their internal resources.
Touchstone Spend Management has developed a Directors and Managers Business Intelligence reporting tool which provides valuable analytics and multi-dimensional analysis of purchasing information.
This tool provides critical reporting in four distinct areas
- Supplier analysis and securing the supply chain
- Cash flow forecasting and cash saving
- Changes in spend profile and influencing factors
- Business process improvement
For each area, the tool considers the questions that need to be answered and why it is important. These can be delivered onto your desktop quickly.
Supplier Analysis and securing the supply chain
| REF. | I want to ….. | So that ….. |
| S1 | See who my suppliers are by spend | I can check that they are stable organisations and will not interrupt my supply chain. |
| S2 | Do an analysis of spend categories with supplier information | I can risk assess what my options are if a supplier stops trading as to who else I can purchase from in order to achieve more purchasing power. |
| S3 | See if I have key supplier dependency | Identify if there are other organisations we can work with should one of our suppliers cease trading. |
| S4 | Identify the total number of suppliers I use by spend category | I can see if there can be a rationalisation of the supplier base |
| S5 | Identify the geographical location of my suppliers | I can see if there are areas where we have a lack of suppliers or if there are risks over delivery. For example there are few flights taking place, can the items we ordered actually be delivered? Should we consider local suppliers instead? |
Cash flow forecasting and cash savings
| REF. | I want to ….. | So that ….. |
| C1 | Do a graphical profile by spend category over the past 3 years | I can understand the nature of spend and extrapolate out when payments will be required to assist in cashflow forecasting. |
| C2 | See what purchase orders have been raised, receipted but not invoiced | I can identify what I need to pay for which has been receipted but not yet invoiced. |
| C3 | See what purchase orders have been raised, but not receipted | I can identify what the potential commitments are out there which may be possible to cancel before receipt thus saving money |
| C4 | See what purchase order requests have been raised but not authorised | I can identify what could potentially be cancelled prior to the submission of the order to the supplier. |
Changes in spend profile and influencing factors
| REF. | I want to ….. | So that ….. |
| C1 | Do a graphical profile by spend category over the past 3 years | I can identify if there are underlying changes in the spend profile of the organisation |
| C2 | Perform What if analysis on large spend items based on potential changes in the rate of inflation, currency exchange rates & the wider economy. | To risk assess the impact of price rises and how this could affect overall margins. |
Business process improvement
| REF. | I want to ….. | So that ….. |
| B1 | Identify if my suppliers are meeting delivery performance against agreed delivery times | To see if they are providing the expected level of service, or causing issues in my organisation through delayed delivery |
| B2 | See if the delivery quality on receipt of goods or services is as expected | I can work with my suppliers if there is non-conformance to assist them in improving their service |
| B3 | Identify where there is a price variance between purchase order price and purchase invoice price | I can identify where there are errors in my purchase order procedures / suppliers who regularly change prices |
| B4 | Analyse the goods receipts to see if there are over-deliveries or under deliveries | I can see which suppliers are unable to provide the goods I originally ordered thereby causing issues with both discrepancy analysis of sourcing |
| B5 | Analyse the number of days between invoice receipt date and invoice paid date | I can see if we are meeting our published criteria for paying suppliers in a timely way |
| B6 | Analyse the difference between our budgeted spend and our actual spend | To see how accurate our budgeting process is |
| B7 | Identify spend that is not verified against budget | I can see if there is spend being undertaken without proper checking or approval |
How does it work?
The Directors and Manager’s Business Intelligence Model is delivered through an ETL Data Warehouse and is represented schematically as:
Conclusion
Your finance system, spend management system and other data sources contain valuable information that is waiting to be analysed. By implementing the Directors and Manager’s Spend Management Business Intelligence Tool, it is possible to act quickly and effectively in
- Assessing the stability of your suppliers and supply chain
- Delivering effective cash flow forecasting on your organisations spend and identifying where cash savings can be made immediately
- Model your spend profile to understand potential impacts on your organisations margins.
- Improving business processes to reduce non- conformance
For more information, please contact Touchstone Spend Management on 0207 121 4704
