Magazine article The CPA Journal

Purchasers Discuss Their Working Relationship with CPAs and Accountants

Magazine article The CPA Journal

Purchasers Discuss Their Working Relationship with CPAs and Accountants

Article excerpt

A proper relationship between accountants and purchasers can have a tremendous impact on a company's quality, efficiency, service, and profitability. When a purchasing professional was recently asked what he thought the purchasing and accounting (or finance) departments can jointly contribute, he said they should both work toward obtaining the best value, not just price, for the organization.

A group of purchasers, who also are members of the National Association of Purchasing Management (NAPM), were interviewed to give their views on their accounting cohorts. These purchasers come from various business sectors across the U.S. The purchasers discussed their working relationship with accounting professionals, giving some insight on how they can better understand each other and work better together. Because every organization recognizes their accounting staff by various names (i.e. CPA, accountant, finance, controller), we will refer to the individuals and the departments as accountants or accounting.

UNDERSTANDING EACH OTHER'S ROLE

From the conversations with the purchasers, it was apparent that the relationship between purchasing and accounting varies from organization to organization. Historically and stereotypically, according to the purchasers, there has been an adversarial relationship between purchasers and accountants. "Years ago, purchasers only met with accounting occasionally," said Karen Hawes, materials manager with Epoch Systems. "But that was only for major items or when things went wrong."

One retired purchaser said that not understanding each other's job function is just part of the misapprehension. He said that purchasers and accountants need to understand the goals of their company. Once the overall goals and objectives of the organization are understood, it is easier to see how each department contributes to achieving these goals. "Just as purchasers and companies must partnership with outside suppliers," he said, "these two departments must also partner with each other and with other departments they work with on a regular basis."

Silas L. Carter, director of corporate administrative and operations services with Pitney Bowes, said that sometimes the rules in purchasing differ and are not as clear-cut as accounting policies and procedures. "Once it becomes apparent to both the purchaser and accountant why things are done by each professional," said Carter, "then they are able to negotiate a set of procedures that are suitable for both." Carter said the purchaser's role has to allow for flexibility.

TOO MUCH FOCUS ON THE DOLLAR BOTTOM LINE?

Without diminishing the importance of budgets, many of the purchasers felt that most accountants focused too much of their efforts on the bottom-line dollar amount.

"While accountants may be focused on the dollars and cents of the issues and what that represents in terms of funding, sometimes purchasers need to better communicate to accountants what the requirements are of the user organization (whoever is going to be using the goods or services that your organization is purchasing), said John Semanik, contracts manager with Sun Microsystems. "If the accountants have a level of appreciation for why the expenditure is being considered in the first place and the requirements behind it, they'll be able to reason and understand its importance."

"Clearly, accountants focus on the bottom line dollar amounts--and they should," said Ray C. Stark, vice president of materials management with Allied Signal. However, Stark didn't think the job should stop there. He said in many larger organizations the accountants are taking a much more proactive role in the materials function, such as controlling total costs. "Accountants are a critical part of the process to ensure the operational game plan that has been put into place is having the impact that was expected," said Stark. "Not only are they checkpoints to ensure that your organization's numbers are right, but they also make sure that the financial variables and alternatives are understood. …

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