May 8th, 2014

Supplier statement audit can provide important insights before your next sourcing decision

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With the increasing pressures on the profit margins, the efficiency of the procure-to-pay (P2P) processes has been under intense scrutiny within an enterprise.  Typically, Procurement and Finance organizations manage various aspects of P2P processes.  Thus, for a successful execution of the entire P2P process, each organization needs to understand the actions and motivations of the other.  This P2P mindset threads procurement and payment activities into one continuous lifecycle.

With this in mind it is a worthwhile to consider the details of the entire cross-functional process.  At the front end, one will encounter any number of sourcing and procurement activities where highly trained professionals are chartered to identify the best possible suppliers to buy the best possible products or services at the best possible cost of ownership.  At the far end of the P2P lifecycle, one will encounter Accounts Payable (AP) department whose goal, as told to me by one industry expert, is very simple, “To pay the right entity, the right amount, at the right time.”  This is a simplification of course, but generally, all professionals in the space are pursuing some combination of these stated objectives.

Typically these departments are measured, evaluated and guided through an exhaustive suite of metrics.  A number of sophisticated software applications and service providers stand ready to review, in fine detail, how efficiently resources are being spent across commodities, geographies, business units and supplier types.

Having been a practitioner in this space, I can tell you that even though the concept is simple, AP departments face a number of external factors that constantly challenge their ability to achieve transactional perfection.  As a result, the last decade has seen the emergence of “supplier statement audit” which routinely reviews the transactional (read: payment) history of the enterprise to determine the efficiency of the supplier payment processes.  For too long such supplier statement recovery auditing has been confined to the AP suite as a tool for improving the efficiency of Accounts Payable.  With increased focus on the broader P2P process, supplier statement recovery audit results should be more frequently evaluated by the procurement professionals in the context of the larger supplier management process.

There are many benefits to combining supplier statement audit results into the associated procurement metrics, such as supplier scorecards or spend analytics.  Procurement departments have as much or more to gain by evaluating the results of the recovery effort as do AP departments.  Here are just a few ways procurement can gain from incorporating a review of statement audit results:

      • Statement audits can reveal profit leakage, which procurement needs to understand in order to assess larger budgeting or savings opportunities that may exist.
      • Analysis of recovery claims can reveal valuable  insights that will better inform future procurement activities, such as  overlooking the related nature of separate suppliers and missing out on pricing  discounts.
      • Procurement can identify suppliers that routinely  commit transactional errors and incorporate those suppliers’ lack of accuracy in  the supplier scorecard for a more holistic supplier evaluation.

As a best practice, build in a process to review supplier statement audit results before your next supplier strategy review.  It will provide important insights for managing suppliers.

I would welcome your thoughts on this topic.

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February 28th, 2014

Recovery Auditing Misconception #4

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Recovery Auditing Misconception #4:   I don’t have the time or resources to support this process

The Short Answer:

It takes very little of your time or resources to support a Lavante recovery audit.  All you need do is send a basic vendor file and dedicate one employee for typically an hour per week.

How is this possible?

To begin an audit: Lavante can get started working from a data file that in many instances requires less than an hour for clients to generate. AP typically can create the data file Lavante needs and client IT does not need to get involved.  This is all that’s required for a full recovery audit.

To support an ongoing audit: Clients working with Lavante typically require less than one hour per week to receive and upload verified claims and vendor file updates into their system. No onsite Lavante personnel are ever needed to support the effort.

Clients who wish to save additional time can work with their Lavante Account Manager to integrate claims directly into their ERP system.  Lavante will automatically match claims against an internal credit listing, thus pre-checking the credits and enabling clients to upload credits directly as ledger entries with no manual intervention.

Lavante InSight

For companies concerned about the time commitment or skeptical of the potential benefits of performing a recovery audit, Lavante offers a way for clients to test and sample the service before fully engaging.

Lavante InSight™ gives you a view of the recovery audit you might have. It generates an estimate of the likely cash recoveries and vendor updates you will receive if you choose to engage in a Lavante Strategic Recovery audit. Utilizing your master vendor file, InSight leverages Lavante’s extensive database of historical audit detail, a proprietary, on-demand software application and our Supplier Network of over two million companies to develop a comprehensive vendor and recovery analysis. InSight previews potential cash recoveries, duplicate and related vendors, recovery projections over time, vendor updates, and more.

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February 14th, 2014

Recovery Auditing Misconception #3 of 4

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Recovery Auditing Misconception #3:  Profit Recovery is not a current Priority and I can afford to wait. The Short Answer You may not be aware of it, but credits age and disappear over time. Once gone, they can’t be recovered. Our results show that delaying Lavante’s review could cost your company $62,500 per month for every Read More…

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January 26th, 2014

Recovery Auditing Misconceptions #2 of 4

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Recovery Auditing Misconceptions #2 of 4:  I already have a recovery auditor so I cannot use Lavante now. The Short Answer The Lavante Profit Recovery product is complementary to alternative recovery solutions.  Whether you are currently engaged with another provider, wrapping up an engagement, or planning to engage in the near future, Lavante’s unique offering Read More…

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January 5th, 2014

Recovery Auditing Misconceptions #1 of 4

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Recovery Auditing Misconception #1 of 4:  There aren’t enough recoveries to justify the effort The short answer: You don’t know what you don’t know. Especially if you don’t, or can’t look. Often, companies that we speak with have been underwhelmed by the volume of recoveries that traditional profit recovery firms have identified in the past, Read More…

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December 18th, 2013

Lavante’s Joe Flynn named to The Institute of Financial Operations Board of Directors

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The Institute of Financial Operations has named its new board of directors for 2014. Board members beginning terms in 2014 are: Joe Flynn, founder and chief strategy officer of Lavante Inc., who will serve as vice chair, sponsor development Desiree Clayton, accounts payable director at Nordstrom Inna Le Guen, head of procurement center of expertise Read More…

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November 19th, 2013

Lavante Inc. Taps Alan Park as SVP Sales

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Former Executive from Trimble, Openwave and PINC Solutions brings SaaS enterprise expertise to the leader in cloud-based supplier management and recovery audit solutions SAN JOSE, CA – November 19, 2013 – Lavante, the leading provider of cloud-based supplier information management (SIM) and audit recovery software for Fortune 1000 companies, announced today that Alan Park has Read More…

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September 10th, 2013

Lavante Inc. Announces VP Product Management, Derek Anderson, SaaS Executive from Skire, WorkplaceIQ, Redwood Systems

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SAN JOSE, CA – September 10, 2013 – Lavante, the leading provider of cloud-based supplier information management (SIM) and audit recovery software for Fortune 1000 companies, announced today that Derek Anderson has joined as VP Product Management.  With more than 20 years of experience leading technology companies through growth initiatives, Anderson will lead product strategy, Read More…

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September 4th, 2013

Lavante Inc. and Estuate Partner to Automate Supplier Management with Oracle ERP Systems

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Technology partnership speeds up onboarding of new suppliers while enabling real-time changes to the vendor master file San Jose, CA and Sunnyvale, CA – September 4, 2013 – Lavante Inc., the leading provider of SaaS-based supplier management and profit recovery solutions, and Estuate, a global IT services company and Oracle Gold Partner, today announced a technology Read More…

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