A First Step Purchasing process road map that small business can follow to put its first purchasing process in place that has most features of million dollar systems. With no to little cost to put in place and all work transferable when ready to move to a more formal system.

1. Complete Purchasing Solution for
Small Business
Start ups and established SME’s can put in
place an Purchasing system with nearly all
the functionality of a specialized purchasing
tool or a major ERP system at virtually no
cost.
Bill Kohnen Global CPO Panel

2. Executive Summary
• Having a Purchasing Process in place will:
– Save Money
– Improve Control
– Help meet audit requirements
– Increase value you get from Suppliers
• A functional Purchasing process can be put in place for
nearly no additional cost that has all the elements of
systems used by Fortune 100 that cost millions
• At some point the suggested process does reach its limit
however everything done is transferable to a best in class
SaaS reasonably price more scalable tool.
Bill Kohnen Global CPO Panel

3. SME’s Have The Capability to Put in Place a Purchase
Process Equal to Any Enterprise Solution
• Purchase Request
• Approval Routing
• Signature Authority Matrix
• Indirect Material Sourcing
• Paperless Electronic RFx
• Spend Analytics
• Customized reporting and dashboards
• Supplier Management /Rating
• Audit Ready
• Record Retention
• Compatibility with any ERP system
• Require no additional hardware or software
• Can put in place in weeks
• No limit on number of users and can be used globally
• Complete Flexibility to make changes
• No ongoing maintenance
• Cost to put in place can be all internal or ~ $8,000 Max with outside consultant
Bill Kohnen Global CPO Panel

4. Purchase Request
• Create format suited to your needs on excel
• Auto calculate easy to set up
• Frequent users can save with prepopulated
info
• Variety of options for numbering if needed
Bill Kohnen Global CPO Panel

5. Sourcing
• Purchasing Group publishes Approved Sources
Listing
• Can be a word or excel document that simply
lists:
– Category,
– Link to Supplier Website Set up for company
Bill Kohnen Global CPO Panel

6. Signature Authority Matrix
• Simply Create as a Excel Worksheet
• Maintained by Controller
• Posted on public shared drive, sharepoint site
or internal website
Bill Kohnen Global CPO Panel

7. Approval Routing
• Easily done with Outlook utilizing voting
buttons
• Requestors puts requests on body of PO
• Requestor adds approvers per signature
authority matrix
• When approvals obtained requestor forwards
to company main contact for purchase request
approvals
Bill Kohnen Global CPO Panel

8. E Rfx
• Templates created as Word and/or Excel
• Evaluation templates as Word an/or Excel
• Team review sites set up on shrepoint or
shared folder
Bill Kohnen Global CPO Panel

9. Spend Analytic
• Best place to draw data is from Accounts Payable
• Get in excel format
• Payee, Date, description of service, requestor,
business group, pay terms
• Unlikely that data out of AP has all information
needed and will need manual intervention
• Get data 90% correct
• Use pivot table for review
• 2 to 3 times per year is ok for frequency under
normal conditions
Bill Kohnen Global CPO Panel

10. Custom Dashboards
• No limit to views based on what is important
to you
• Can view and create from raw spend data
• Can publish “standard” reports as KPIs
• Presentation in Word, Excel or Powerpoint
Format
Bill Kohnen Global CPO Panel

11. Supplier Management and Rating
• Excel Format
• Category Manager can route view email to
approvers or simply have quarterly ratings
done on sharepoint or shared drive
• Transfer rating template to send to supplier
via e-mail
• Save ratings and supplier message to shared
folder for audit
Bill Kohnen Global CPO Panel

12. Audit Ready
• Finance and Accounting Audit
– Signature Matrix Readily available
– Process follows accepted business practice
– Easy access to approvals/documentation for detailed
audit
• ISO/TS/Customer Audit
– Supplier Management and Rating records stored in
one electronic location
– Easy access from any site globally
– Typically would add other documentation
Bill Kohnen Global CPO Panel

13. Record Retention
• Simply keep on shared drive
• Storage requirements not significant
• Total flexibility to define how to store
– By time
– Dept
– Request
– Amount
• Even bulk storage is easily searchible
Bill Kohnen Global CPO Panel

14. Compatible with any Finance ERP
• However you manage overall financials
whether manually, cloud based SaaS like
NetSuite or enterprise wide SAP/Oracle data
easily input into system.
• Can be clerk level manual process
• Possible to write macro to pull information
directly from request but requires more
standardization and discipline in process
Bill Kohnen Global CPO Panel

15. Requires No Additional Hardware or
Software
• Assumptions
– You have MS Office with server.
– Internet
– Sharepoint is optional
Bill Kohnen Global CPO Panel

16. Easy to Put in Place
• Create forms and templates
• Deploy
• Train main users
Bill Kohnen Global CPO Panel

17. No limit on number of users globally
• Only constraint is the Microsoft licensing
agreement you have but generally all
employees who would create requests would
need access to Microsoft anyway
• Can easily customize format and templates for
local languages and process as needed
Bill Kohnen Global CPO Panel

18. Complete Flexibility
• You control format of templates
• You control routing
• You control process
• All can be changed with no cost
Bill Kohnen Global CPO Panel

19. No Additional Ongoing Maintenance
• For the actual application no extra
maintenance.
• Just what you may or may not already have in
place
Bill Kohnen Global CPO Panel

20. Cost to Put in Place
• Could be done all internally with someone that have understanding
of Purchasing/ Finance process with average Microsoft knowledge.
• Outside consultant can bring process knowledge and coach on best
practices for setting things up which generally makes things move
faster.
• Typical time and cost depends on company size and how much they
initially want to put in place. A basic purchase request process
including approval with audit ready storage should take a week and
be ~ $10K
• Incorporating Rfx and Supplier Rating add cost usually related to
more time spent on methodology/process and template design.
Bill Kohnen Global CPO Panel

21. Go for it
• Can put in place now
• Do it yourself or low cost outside help
• Nothing you do will lock you in to this as a ling
term solution
• When and if time comes to move to a SaaS or
Enterprise tool no restraints and legacy data
could easily be moved to new system
Bill Kohnen Global CPO Panel