Supply chain risk is often a top strategic risk. It doesn’t matter the type of organization you’re in—government, retail, hospitality, services, manufacturing, healthcare, utilities, or otherwise—all organizations procure goods and services. The Purchase-to-Pay (P2P) process covers the most material risk areas, including requisitions, procurement, vendors, receiving, inventory, invoicing and payables.

Figure 1: Profile any process to illuminate key metrics and score against your benchmarks to determine if its healthy or needs further investigating

The complexity in overseeing procurement is sheer volume. Organizations process hundreds of millions of transactions with tens of thousands of vendors spanning dozens of material sub-processes—representing material risk for CFOs and Procurement leaders. In addition to all that room for errors, the ACFE’s Report to the Nations on Occupational Fraud & Abuse 2016 reports that 76% of occupational frauds happen in seven key departments: accounting, operations, sales, executive/upper management, customer service, purchasing, and finance. The highest percentage of cases (83.5%) involved asset misappropriation, with billing schemes being the most common sub-scheme (22.2%)1.

One way that organizations are improving performance and reducing risk is through the adoption of technology that can improve the efficiency and oversight of these activities. Monitoring your P2P process with data analytics not only mitigates risk, but also benchmarks a key performance indicator (KPI) scorecard so you can referee sub-optimal process areas versus high performing ones. When hitches are discovered, flag them and use a central platform to assign, review and remediate across your process owners, your assurance team and any stakeholder in-between.

SUPPLY CHAIN OVERSIGHT: PURCHASE-TO-PAY MONITORINGP2P is complex and vendors make mistakes. Check, before you end up paying for them.

1 Association of Certified Fraud Examiners, Report to the Nations on Occupational Fraud & Abuse 20161

SOLUTION BRIEF

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SOLUTION BRIEF

77% of occupational fraud occurs

in key P2P processes

2/3

of external financial statement audits uncover findings on vendors

THE ACL SOLUTION FOR MONITORING PURCHASE-TO-PAYACL’s approach to mitigating supply chain and P2P risks is to increase visibility over your entire procurement process. Analytics reveal the truth by monitoring your entire dataset of transactions, comparing among multiple business and third-party systems, testing complex authorization processes, and finding sub-optimal performance and seven-figure mistakes. Engage your entire team through trackable processing of flagged activities—and enhance accountability and sense of ownership—all within a single collaborative platform that lets you manage the details and see the big picture.

Figure 2: Monitor your procurement process

REQUISITIONS

This is an area where an organization needs to balance the need for controls and approvals with the need for the business to efficiently procure the materials, parts and products to keep competitive. Analyze your requisition process to find out what’s working and what’s not. Requisitions are most often made through your ERP system. Analyze transaction data and it will illuminate the sub-process areas red flags that stick out, such as: ■■ Split purchase requisitions■■ Dormant POs■■ PO changes after requisition■■ Requisitions with no POs■■ PO date is after Requisition date

STOCK & INVENTORY

Inventory can be symptomatic of another sub-optimal process—or, inaccurate stock levels can reveal the inability to understand how to run a process or an organization. Here’s what you can look to illuminate:■■ Inventory ratio (churn) vs. benchmarks■■ Excess inventory■■ Inadequate inventory■■ Obsolete inventory■■ Shrinkage

VENDOR MANAGEMENT

Vendor management is one of the most critical areas in managing P2P controls. When fraud occurs, it commonly starts here. Regardless of industry, vendors play a key role in the success of your organization. Drive that success by applying analytics to develop a comprehensive vendor management process to spot, for example:■■ Frequent changes to vendor master file■■ Invalid vendor addresses linked to

employee information or PO boxes■■ Duplicate vendors■■ Foreign bank accounts outside your

organization’s region of business

■■ Dormant or obsolete vendors■■ Sanctioned vendors flagged in OFAC’s

SDN list■■ Outliers highlighting poor quality, high

returns or suspicious inventory■■ Contractual differences in freight costs

■■ Third-party vendor compliance of certifications such as PCI, Cloud, ISO, Health/Quality, etc.

■■ Vendor benchmarking to identify good performers & contrast poor

PROCUREMENT & RECEIVING

Set the tone: make sure the procurement process adheres to both the letter and the spirit of the law while also aligning with company strategy. ACL makes quick work of analyzing data in ways that other tools simply cannot. Harness the power of analytics throughout this process and increase transparency and visibility for better decision making throughout the organization by monitoring for:■■ Split purchases■■ Inappropriate Segregation of Duties (SOD)

■■ Open or modified POs■■ Data entry errors

■■ Contract risks, such as terms that do not match organization appetites or pricing different from actual

PAYMENTS

Don’t let anything slip through the cracks. Make sure all loose ends are tied up and that payments are legitimate and accurate. ACL analytic technology has a proven track record that stomps out many of these problems by letting you monitor: ■■ Broken vendor billing processes■■ Unusual payment dates, such as weekends

or holidays■■ Pricing and contract compliance

■■ Payments exceeding company thresholds or processed through one-time vendors

■■ Invoice dates that are earlier than PO dates■■ Inappropriate SOD throughout the process

■■ Early payments, late payments fees and discounts not taken

■■ Payments made to employees■■ FCPA or other anti-bribery violations

BENEFITS OF ACL’S APPROACH TO P2P MONITORINGACL technology enables you to:■■ Find gaps in your ERP system and

controls that are invisible to your ERP system, which ACL is designed to flag.

■■ Improve business agility and process efficiency by using ERP-independent monitoring instead of adding more ERP controls that choke mission critical operations.

■■ Economically access and analyze large datasets and compare across any data source or system.

■■ Build a defensible, repeatable trail of risk mitigation activities as proof for external regulators or oversight boards.

■■ Update and re-configure analytics to evolve your testing with changing thresholds or regulatory requirements.

■■ Collaborate on a central platform to automate review and remediation workflow of flagged activities.

■■ Gain clear oversight of material financial processes and people to improve your cash flow, mitigate risk, and optimize your P2P process.

■■ Get 360° oversight via the platform by integrating a gratuity pre-approval hotline to comply with conflict of interest obligations and a whistleblower hotline to stamp out occupational or vendor fraud.

■■ Our large customer community of analytic gurus has been in your shoes, giving you experienced knowledge sharing—and a solution built on 30+ years of global experience across all industries.

“With ACL, in one case, the agency said they had 5,000 vendors in

their file when they actually had 40,000. When you’re able to make the

recommendations very specific and include precise numbers, the agency

is much more likely to act on the recommendations.”

− Michael Cragin, Senior Information Systems Auditor, Louisiana Legislative Auditor

solution-brief-supply-chain-oversight-p2p-monitoring

LEARN MORE ABOUT WHAT YOU CAN ACCOMPLISH WITH ACL

Call 1-888-669-4225 to speak with a representative

Visit our website at acl.com Email us at info@acl.com

© 2016 ACL Services Ltd. ACL and the ACL logo are trademarks or registered trademarks of ACL Services Ltd. All other trademarks are the property of their respective owners.

CUSTOMER ROI:

$2.1M identified in overpayments to Los Angeles

School District contractors

− Forensic Strategic Solutions

$17M in vendor billing errors during a single year

− National Healthcare Organization

$21M+ in annual efficiency savings through a

risk-based approach and full data coverage in pre-auditing payments

− B.C. Government Ministry of Finance

“The ROI on

Analytics Exchange

is excellent. Less

than a year after

implementation, the

solution has already

paid for itself many

times over.”

− Brian Anderson, Accounts Payable Manager, Emergency Medical

Services Corporation

TIME TO VALUE

30%time saved accessing

data spread across disparate & independent

business systems reported by

3/4 of respondents

81%of customers think that

the use of ACL™ Analytics has

resulted in an improvement in how their department is perceived by senior

management

61%of leaders said overall

change management in automated processes in ACL™ GRC was “easy” or

“very easy”

46%felt ACL Analytics gives

their team the equivalent of 1 FTE in extra bandwidth to do

value-added work

Figure 3: Build a story with visuals that benchmark good or poor processes and add a contextual narrative explanation

Get out of the unknown. Shine the light on your P2P process and reveal the truth with data, and connect stakeholders through a central platform for end-to-end oversight.

Call us at 1-888-669-4255 or email info@acl.com to speak with one of our experts to learn how to get better oversight of your supply chain, while improving process efficiency, so you don’t end up paying for material mistakes or fraud.

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SOLUTION BRIEF