Rakesh Khanna

My perspective on Procure to Pay Control Processes Hello, My name is Rakesh Khanna. I qualified as a Chartered Accountant in 1996. Started my career with Spice Telecom (now Vodafone Idea) and then last decade and a half, I’ve been working with American IT Software companies like Quark Media House, Dilithium Networks, TranSwitch Corp and Guavus Network Systems (now part of The Thales Group, France) in Finance Leadership positions. For the companies operating in multiple countries where Owners and Top Management are centralized in the Headquarters, the engineering and sales operations are in many different countries. Apart from the individual integrity of the employees, the process workflow robustness is essential to keep the trust going and optimize on purchase costs and payments and plug leakages if any. Ensuring those robust processes and controls have been part of my job role as Finance Leader for India operations for many of these global companies which I would like to share here. No. 1, having strong IT tools and resources and have the approval workflow on that tool is absolutely essential to achieve transparency at all levels. We used Accounting ERP like Netsuite and Confluence/jira to define these workflows and automated most of the purchase process. The purchase threshold for various categories were defined and approval hierarchy was also clearly defined with dual approvers for each purchase. Purchase value in Department Head Global Dept Finance India Approval Head Approval Approval Less than INR 50k x x > INR 50k x Head CFO Approval x The Department Heads and other Approvers were identified and given appropriate rights in IT tools to view and approve/reject purchase requests (PR). For any PR raised in the system by User Department, the first approval is in Confluence/jira where the request is vetted by user department head and if approved, it gets to the Procurement department for next actions. For all high value items, minimum three quotes are requested. The Procurement and User Department works jointly on evaluating the quotes and making the final purchase choice. The involvement of more than one person in purchase process ensures competitive and fair price and individual biases and preferences are eliminated. Once the final purchase choice is made, PR is raised in Netsuite ERP attaching approval quote and Performa Invoice etc where its first approved by concerned Departments and then by Finance Approver and post that numbered Purchase Order is generated from the system and issued to vendor. The items once received are recorded against that PO in Netsuite and PO is closed. At any time or end of period, we can see open POs in the system. Similarly for payments approvals against these purchases, approval hierarchy is defined in bank account with Dual Signatory authorization for all purchases. Payment value in India Finance Global India CEO/Head Global CFO India Head Approval Controller Approval Approval or CFO Approval Less than INR x x 500k > INR 500k x x Having clear purchase process and guidelines helps the local country teams and the outside global community to develop a common understanding and develop mutual trust which is so important for smooth functioning of global companies. For any questions or discussion, please feel free to write to me at-Regards, CA Rakesh Khanna - www.Linkedin.com/in/rakeshkhanna