The Globalization of Procurement and Accounts Payable

Transcription

1 The Globalization of Procurement and Accounts Payable Presented by: Katrina Lomax & Ken Wendel, CPA Copyright 2016 All Rights Reserved. Reproduction without permission is prohibited.

2 Agenda Trends in Globalization Area Specific Steps to Globalization Future of Globalization

3 Agenda Trends in Globalization

4 Globalization/Globalisation The process of integration internationally, catalyzed from the interchange of world views, products, ideas and other aspects of culture. Trade & transactions Capital and investment movements Migration and movement of people Dissemination of knowledge Information technology Economic, cultural, and political globalization Albrow, Martin and Elizabeth King (eds.) (1990). Globalization, Knowledge and Society London: Sage. ISBN

5 Map of the Silk Road The volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled, from $468 billion to $827 billion. Distinguishing this current wave of globalization from earlier ones, author Thomas Friedman has said that today globalization is farther, faster, cheaper, and deeper.

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7 Upside to Globalization Reduction of costs for businesses Provides employment in emerging countries Promotes progress in developing countries Free trade agreements = more variety Speed in information; local, regional, global Big data analytics in real-time Allows movement of people - large market of skills Shared info and knowledge Encourages automation and selfservice Social acceptance Decisions made are for global benefit 7

8 Downside to Globalization Shifting of jobs to lower cost countries Downward pressure on wages in home countries Added VAT (up to 22%) Spotlights multinational countries mistreatment of labor force Theft of IP, Data Privacy, and Security Mismanagement of natural resources Deindustrializing countries Political unrest Risk Cultural frustration Time zone challenges 8

9 Measuring of Globalization 9

10 Maturity of Globalization Regional Maturity EMEA Netherlands Ireland UK US APAC China Philippines Latin America Private companies have a higher maturity of globalization than public companies 100% of Fortune 500 companies use Shared Services 10

11 Agenda Area Specific

12 Now more than ever, the need for direct, clear, and concise communication is key to success Employees need to accept and align themselves with the corporate decisions towards globalization The necessity to lower costs can sometimes outweigh quality and performance of customer service

13 What does globalization mean to Procurement Global supplier options Global contracts & PO s Global PO format Standardized sourcing practices Global Procurement Playbook Cultural localization dependent Tighter control over corporate policies Change management and communications

14 What does globalization mean to Accounts Payable Multilingual requirements Consistent high-quality customer service Understanding of VAT and local taxation rules Multiple Currencies Foreign supplier onboarding requirements 24/7 help desk/resolution Demand for immediate response System integration Electronic payment solution Training and maintaining talent 14

15 What does globalization mean to Accounting? Cross-functional process management Elimination of functional silos Enhancement of cross-functional tools and approaches Globalization of Accounting Standards US GAAP vs IFRS Provide consistent and comparable information IFRS in the United States pros and cons The SEC and IFRS International Standards on Auditing 15

16 Agenda Steps to Globalization

17 On the road to global success Dismantle silo processing Centralize Procurement, AP, and Accounting (Shared Services => GBS) Standardize naming conventions (AP, Proc, GL) Expose limitations local statutory requirements Standardize processes Standardize policy Standardization across regional boundaries enables management understanding to make strategic decisions 17

18 Tools of Globalization AIS/ERP Accounting Information Systems Enterprise Resource Planning Cloud Computing System Integrations Interdependency of Regions Supply chain, CM, logistics, BPO s

19 Best Practices for Globalization Analyze Data volumes Legal requirements/technical requirements One ERP Clean up the supplier master Globalize policy and procedures Enforce policy Drive good behavior/practice Standardize forms with flexibility for local statutory requirements 19

20 Best Practices for Globalization (cont.) Standardize terms with allowance for local requirements Have a primary BPO that covers all regions with specialist in those regions Limit access Automate when it makes sense Paperless Acceptable file formats Change management Use of canned responses, limit fluff (lost in translation) 20

21 Agenda Future of Globalization

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24 High-Tech outlook APAC AMERICAS EMEA 24/6 Time zone coverage Electronic Cloud Computing Social Media INDIA HQ

25 Q & A Katrina Lomax Global Source-to-Pay Operations Manager klomax7@gmail.com Ken Wendel, CPA Global Accounting Operations Manager kenwcpa@gmail.com