{"id":2691,"date":"2016-08-10T20:50:51","date_gmt":"2016-08-10T20:50:51","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=2691"},"modified":"2022-05-24T20:46:43","modified_gmt":"2022-05-24T20:46:43","slug":"more-effectively-managing-service-related-purchase-orders-and-receipts","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2016\/08\/more-effectively-managing-service-related-purchase-orders-and-receipts\/","title":{"rendered":"More Effectively Managing Service-Related Purchase Orders and Receipts"},"content":{"rendered":"

Dealing with the many complex issues surrounding the procurement of services is a challenge that every company faces to one degree or another.\u00a0 Often, the solutions implemented in this area of Procure-to-Pay<\/a> are workarounds that may accomplish the task at hand, but are filled with manual processing and less than ideal controls.\u00a0 Even with the advanced technology available in this process area, many companies continue to struggle with this aspect of their operation.<\/span><\/p>\n

Recently, utilizing Peeriosity\u2019s iPollingTM<\/sup> technology, research was conducted regarding the different approaches companies are taking in dealing with service-related purchase orders and receipts.\u00a0 The first poll question focused on the primary approach the surveyed companies use to create purchase orders related to the procurement of services.\u00a0 Reviewing the results, the most prevalent response (44%) was utilizing a combination of different approaches dependent upon the type of services purchased (advertising, legal, consulting, etc.).\u00a0 Those approaches include POs specific for a unit and dollar amount (22%), POs specific to just a total dollar amount (17%), and utilizing POs that have a \u201cnot to exceed amount\u201d in units or dollars (11%).\u00a0 Just 6% of the companies participating in the research do not use purchase orders for service-related procurement.<\/span><\/p>\n

\"\"<\/p>\n

The results from this poll question clearly point out the diversity of approaches companies take to deal with service-related purchase orders.\u00a0 This is especially true when the majority have to utilize a variety of processes depending on the type of service being procured.<\/span><\/p>\n

The second poll question was similar to the first, but focused on how services were received against purchase orders, with the listed options being based on dollar amount, unit of measure, or a combination of both.\u00a0 Looking at the results, 38% of companies do not enter a receipt for services, and instead rely on either compensating controls or a separate process to verify that services were performed; typically using a validation process where the requestor or PO initiator is contacted either using a workflow tool or by email.\u00a0 In these cases, the method used might include either positive verification, where a reply or confirmation is required, or negative verification, where a reply is required only where either the service was not performed or where an adjustment is needed.\u00a0 The break-down for the 62% of companies who \u201creceive\u201d services includes 28% of all companies who input the dollar amount as goods received, while just 5% input the unit of measure.\u00a0 Another 28% input both the dollar amount and unit of measure upon receipt of the service.\u00a0<\/span><\/p>\n

\"\"<\/p>\n

Some of the poll comments from Peeriosity members include the following:<\/span><\/p>\n

Healthcare, Pharmaceuticals, Biotech Member:<\/strong> Services are received in the system when the requestor receives a confirmation alert from BPO that an invoice has arrived there – requestor to liaise with business and mark receipt in system.<\/span><\/p>\n

Software & Internet Member:<\/strong> We do not do a goods receipt for services. Only the invoice is approved by the requester in this case. We are having issues in this area and need to revise the process.<\/span><\/p>\n

Healthcare, Pharmaceuticals, Biotech Member:<\/strong> Our service type POs do not require receiving so we have a validation process in place prior to payment. We use our invoice approval workflow tool to validate the services.<\/span><\/p>\n

Media & Entertainment Member:<\/strong> POs are currently a very small amount of our overall Procure-to-Pay spend.<\/span><\/p>\n

Healthcare, Pharmaceuticals, Biotech Member:<\/strong> “Receipt” is not recorded in the traditional sense against the PO (POs are setup “Do Not Receive”). However, we utilize a back-end approval through ERP workflow for the original requestor to acknowledge that services were rendered per the invoice. We use PeopleSoft for our system.
\n<\/strong><\/span><\/p>\n

Other Industry Member:<\/strong> We ask the supplier to quote our SAP SES number for the 3-way match.
\n<\/strong><\/span><\/p>\n

Healthcare, Pharmaceuticals, Biotech Member:<\/strong> For services that are a set amount, we create amount and quantity lines as a recurring purchase order based on the time of the service. If the service is variable, but expensed to one department\/account then we create an amount contract\/purchase order to not exceed (blanket). If the service is variable, but expensed to multiple departments at one of our sites, it is typically non-PO or several blanket orders.<\/span><\/p>\n

Non-Profit Member:<\/strong> Occasionally, a line-item PO is established for services, but amount-only POs (also referred to as Contract POs) are issued for services and the invoices themselves are scrutinized and approved up to the cumulative maximum of the PO.<\/span><\/p>\n

How effectively does your company handle service-related purchase orders and receipts?\u00a0 Is there an opportunity to improve in this area?<\/span><\/p>\n

Who are your<\/em> peers and how are you collaborating with them?<\/span><\/p>\n

\n

__________________________________________________________________<\/p>\n<\/div>\n

\u201ciPollingTM<\/sup>\u201d is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity\u2019s integrated email system, Peer MailTM<\/sup>, members can easily communicate at any time with others who participated in iPolling.<\/span><\/p>\n

\n

Peeriosity members are invited to log into www.peeriosity.com<\/a> to join the discussion and connect with Peers.\u00a0\u00a0 Membership is for practitioners only, with no consultants or vendors permitted.\u00a0 To learn more about Peeriosity, click here<\/a>.<\/span><\/p>\n<\/div>\n

 <\/p>\n

<\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":"

Dealing with the many complex issues surrounding the procurement of services is a challenge that every company faces to one degree or another.\u00a0 Often, the solutions implemented in this area of Procure-to-Pay are workarounds that may accomplish the task at hand, but are filled with manual processing and less than ideal controls.\u00a0 Even with the […]<\/p>\n

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