Internal Processes – Built-in Traceability and Enhanced Supplier Knowledge
In this four-part series, we’ll walk you through the key steps of effective supplier management—from evaluation and setup to payment and ongoing monitoring. In this fourth and final part, we’ll wrap things up by focusing on how to ensure internal controls through automated approval workflows, comments, and logging.
We have now gone through the entire process, from an initial supplier evaluation to the ongoing and regular checks that should then be conducted throughout the life of the supplier relationship. We’ve seen how this work can be simplified and made more efficient through automated processes driven by the actual needs of your business. So what’s left? Not much, really. In this final section, we’ll focus on traceability—how to ensure that the right people are involved and that your business can look back and see which checks were actually performed and when.
The Approval Workflow – The Right Person for the Right Decision
Having an efficient and well-designed approval workflow can be one of the most important factors in detecting errors and fraud. This applies to both new suppliers and recurring payments. Ensuring that a dual-review process is in place to approve new suppliers drastically reduces the risk of internal fraud or missed checks that could allow an unscrupulous party to slip through the cracks. In Betalkontroll, users can set up automated approval workflows that ensure compliance with the established approval process. This provides peace of mind for the organization, reduces risks, and saves time.
Information Sharing – Knowledge That Remains Within the Organization
It’s not just during the approval process that an organization needs streamlined processes for sharing information to get a second set of eyes on a case. It’s often helpful to seek input from multiple people within the organization when evaluating a warning regarding a payment or a supplier. In Betalkontroll, users can share cases directly within the system with colleagues to get their input. They can then decide whether to approve, stop, or investigate a case further.
In addition to sharing information in connection with decisions, there is also great value in documenting information that may be useful for others within the organization to access, either immediately or in the future. By linking comments to suppliers and payments, it is easy for colleagues to understand later which decisions were made and on what grounds. Another example is blocked suppliers. By blocking suppliers in the system, you can be alerted at a later stage—or in another part of the organization—if you are about to initiate a payment to a supplier that you have already chosen to block for valid reasons.
Logging – Full Traceability for Monitoring and Auditing
The examples above illustrate how users can streamline their audit work by sharing information within the organization. Another key piece of the puzzle is having a system that automatically logs decisions made. Even if you choose not to add a comment or share a case with a colleague, it’s still important for the organization to be able to go back and see which cases have been handled. By using a system like Betalkontroll, this happens automatically. Every check performed by the system and every decision made by users is logged and compiled into a history that is accessible to your organization. This is, of course, beneficial for your own follow-up, but it is also something that auditors appreciate, as it allows them to verify that your organization has strong internal controls. Below are some of the elements that auditors typically want to verify:
- Ensuring that suppliers are approved before they are used
- No single person may create, approve, and pay a supplier on their own (the four-eyes principle)
- That all decisions, changes, and payments are logged and can be tracked retrospectively
- That there are controls in place to detect discrepancies, incorrect payments, and fraud risks
Summary
To summarize, we can conclude that effective supplier management begins even before a supplier is added to the system. Through structured supplier evaluation and risk-based screening, organizations can identify unscrupulous actors, ensure that suppliers meet basic requirements, and minimize the risk of financial, legal, and operational problems. Depending on the supplier’s importance and risk level, the organization can also conduct in-depth checks to build a strong and sustainable supplier network.
Once a supplier relationship has been established, it is important to continue the process through ongoing checks, analyses, and follow-ups. Automated monitoring makes it possible to detect changes in suppliers’ status—such as deteriorating financial health or other risk indicators—and to take proactive action before problems arise. At the same time, regular analyses, reports, and data management strengthen internal controls, ensure compliance, and help organizations identify errors, reduce risks, and streamline their financial administration.
Ultimately, effective supplier management is about bringing together processes, information, and decisions on a single platform. When knowledge, controls, and historical data are all centralized in one place, it becomes easier to make well-informed decisions, reduce reliance on specific individuals, and build a more resilient organization for the future.
Don't miss the previous installments in this series:
Part 1: Supplier Evaluation – Choose the Right Supplier and Avoid Unreliable Players
Part 2: Ongoing Supplier Audits – Identifying Risks and Working Proactively with Suppliers
Part 3: Regular Checks, Analyses, and Reports—Ensure Compliance and Identify Costly Errors