Is Coupa a Panacea?

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Is Coupa a Panacea?

IS COUPA A PANACEA?
3 Watchouts for Implementing Spend-Management Systems

While many companies are drinking the elixir of Coupa and other Business Spend Management (BSM) systems, the reality of these latest cure-all innovations may be hard to swallow. BSM systems can add to the complexity of procure-to-pay (P2P) processes, slowing them down, changing cycle times, and creating unseen problems, especially during implementation.

“No matter what spend platform you’re using, or even if you have a 3-way match on an invoice – you can still have duplicate charges, rate errors, or just a bad invoice that can slip through the cracks of Coupa or other BSM systems,” said Brian Barr, CPA, Supply Chain Senior Consultant for cost-recovery leader CPRS. Barr is an oil & gas industry expert who has spent more than 20 years guiding finance and supply chain projects in leading Fortune 100 companies. “Complex service invoices can be especially challenging to get right, as veterans of Coupa and other BSM system implementations know. Some managers will risk using blanket PO’s rather than spending the time to properly code and track each line item.

Barr notes three important admonitions for implementing BSM systems:

1. Establishing coding governance is never easy.
2. Data depth/density in BSM systems are rarely 100% accurate.
3. Out-of-pocket costs are not the only expense factor.

For insights on how our Cost Recovery Audits can identify the deepest line-item errors, contact us. Read on for details about the first of three important watchouts when implementing Business Spend Management systems.

Establishing coding and taxonomy governance is always difficult and never easy.

“It’s extremely difficult to establish coding governance, and even more difficult to establish consistency in coding,” said Barr. “Coding consistency may be the hardest part, since no existing company can have every vendor running the same BSM system and using the same taxonomy. It’s just not possible – inevitably, you’ll have vendors on different systems using different codes. Even if you’re a brand-new startup, no company can have every single partner on the same system.”

Gaining greater visibility into spend also can be done through aggregating invoice line-item detail around the specific product or service purchased. Using this best-in-class methodology and its proprietary Pearl™ software suite, CPRS creates significant process improvements for any business, whether using a BSM or not.

“The challenge is elevated when establishing new codes once a BSM system is in place,” Barr continued. “Who can establish new codes? How will new spend categories fit in your taxonomy? We tried for 18 months to implement a BSM at one of my previous companies, a decades-old establishment, and gave up,” Barr concluded. “It was just too difficult.”

If you’re considering a Business Spend Management system, contact the auditing experts at CPRS first to see how our 30+ years’ experience and proven methodologies can help your business recover lost profits.