Helping mitigate commercial risk across purchase-to-pay solutions

Published on : 1/15/21
  • Curtis Hayward-Smith, head of cost management in Sodexo’s Property Management team explores how purchase agreements, data management and commercial property expertise come together with technology and innovation to deliver both control and efficient process at scale.

    Curtis hayward smithThe Purchase-to-Pay (P2P) process is fraught with challenge for finance directors - paying the supply chain on time while retaining control can be really demanding.

    Traditionally, P2P has been considered simplistically as a series of transactions fulfilled via purchasing agreements, however, opportunity exists to manage the payment cycle effectively and benefit from data rich analysis. 

    So, what does this mean in the context of managing a complex property estate and how do we, as Sodexo’s property management service, approach this?

    Our aim is to achieve the following outcomes from a mature P2P process:


    There is real jeopardy in not deploying the right P2P solution. It often manifests in a disruption to service delivery, contractual disputes and poor customer satisfaction. What is not immediately visible is the loss in not commercially managing contract delivery of suppliers. This often only comes to light retrospectively as financial performance is reviewed.

    How do we approach the development of effective P2P solutions with our clients within property management?

    The following components together optimise the effectiveness of the solution for our clients.


    • Purchase agreements - accurate representation of supply chain contracts in core systems, that removes ambiguity and the potential to delay process.
    • Data management and workflow - a CAFM system with the flexibility to store bespoke and configurable data, integrated with workflow that supports and controls interventions from commercial and technical teams. A fully auditable data history that provides assurance, and data alignment to contractual service lines to support first-time fix, whilst also providing a data rich insight into performance.
    • Financial reporting and variance analysis – automated allocation of account codes, linking into the service hierarchies which provides the basis for effective financial analysis, and early insight into accruals, risks and opportunities. With additional integration into a data warehouse, this provides even greater scope by utilising other data sources about the estate such as space, people and customer data to provide valuable insight into the performance of the estate.
    • Budgetary sign-off – the ability to represent client financial authority supports commercial control.
    • Commercial property expertise – operating with the support of our systems and commercial teams provides our clients with assurance of Contract compliance and delivery of value. By checking against contractual commitments, pricing and validating the completion of works, we demonstrate that the supply chain is delivering value for money.

    The P2P solution works across multiple teams to support critical property management decisions around repair verses replace scenarios.

    How is this achieved whilst retaining both control and delivering efficient process, all at scale? 

    Moving on from the traditional, transactional approach of P2P deployment, we incorporate technology and innovation to target areas of highest financial risk, whilst controlling management costs and supporting financial reporting requirements with data riich analysis and insight.

    The deployment of technology and innovation within the P2P process has the following benefits:

    • Auto approval rules embedded in system workflow, that provide the flexibility to support value for money interventions.
    • Automated application of financial delegated authority, supporting technical and site knowledge-based approvals.
    • Pre-approved values and automated notification to raise invoices prevents disputed costs.
    • Document scanning technology ensures invoices adhere to VAT requirements, replacing manual checks.
    • Supply chain access to web-based invoice portals, providing audit assurance.
    • Automated alerts avoid PO breaches, preventing service delays.
    • Second generation of automation moves from application of auto-approvals rules, into control of repetition events.

    How have we applied our approach to benefit our clients?

    Early on in the contract mobilisation with a large government department, it became clear our client had limited insight into the costs of managing their property estate as they were coming to the end of a long-term Private Finance Initiative (PFI) contract. This business requirement created a technical challenge around how to optimise cost data posting into our client’s financial ledgers, to enable the required insight.

    The complexity of our client’s business model required multiple purchase orders with line detail for each supplier, ensuring flexibility of managing VAT recoverable and non-recoverable costs, accurate analysis and correct VAT treatment. The requirement was to map work order data from the CAFM system across multiple purchase order lines in the finance system. 

    Working with our client, we created an integrated technical solution that worked across the CAFM, middleware and finance systems. This enabled the management of hundreds of thousands of complex data calculations, incorporating additional data attributes and deploying mapping logic to ensure accurate payment and general ledger postings daily.

    We worked with our middleware provider to develop the ability to hold and amend purchase order values, track costs and send automated notifications to our client, notifying them when purchase order line values are about to, or have breached. This enables our client to early uplift purchase order values, prevent delays in service delivery and makes sure that suppliers are paid promptly.

    More information:

    • Find out more about Curtis' role.
    • More information about Sodexo's Property Management and Advisory Services can be found here.
    • OR if these challenges sound familiar to you, and you’d like to talk to a member of our team click here.