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Lack of Transparency Leads to Maverick Buying

Michal Samuels
Lack of Transparency Leads to Maverick Buying

All companies encounter Maverick Buying, when a purchase is made without going through the proper purchasing channel and procedure of vendor selection, price comparison, negotiation, and contract agreement. 

There might be a scenario that a purchase was done through pre-approved suppliers, but outside of the correct purchasing process, or that a purchase was done through the correct procurement process, but from suppliers that do not have a delivery agreement with the company.

However, no one wants to find out that there is fraud within their company and that a purchase was made with non-contract suppliers, bypassing the entire purchasing process.

Tracking the causes of costly mistakes

Maverick Buying is defined as a purchasing expense, breaking the rules and procedures established by the company. It may happen due to an employee’s lack of awareness that the particular product in need is part of an existing agreement or contract. Even if this happens as an honest mistake, finance teams still need to track back the entire process and understand the case’s root cause to ensure no mal intentions. Nonetheless, Maverick Buying still has a severe impact on a company’s business.

Let’s take a step back before we understand how to track down the person or vendor responsible of Maverick Buying. The more significant challenge is how to detect such instances.

Identifying Maverick Buying

Identifying Maverick Buying requires a systematic approach to analyzing Accounts Payable (AP) spend data, all information having to do with the company spending on external suppliers’ goods and services.

Today most companies detect Maverick Buying by extracting invoices, credit card statements, and any other financial records and spending data from financial systems of record. They then standardize this financial information to make analysis easier. The next stage would usually be to organize this data by amount spent, department, vendor name, and spend category, while concluding with the results’ analysis.

The challenge is that often, given the large amounts of data, a company cannot apply all these stages to all of their data, and they rely solely on data samples leading to inaccurate results and reports. This can then lead to missing out on cases that might contain Maverick Buying.

Another common problem is that existing solutions focus just on financial data, leaving out the logistics part of it. Remember that Maverick Buying starts with not following the right procurement procedure, which starts with issuing a PO and approving it. This is a logistics action, which usually is not reflected in the finance part of the data.

How to overcome the challenge of gaining visibility to all data?

Today in a world of digitization and automation, there is no excuse for financial teams not to use available technology tools to map vast amount of data allowing them accurate visibility of how their financial process works.

However, any of the solutions available today that allow mapping and visualization of financial data usually take months to implement and large teams of consultants working on the project. It’s essential to shop around before committing to one.

Data extraction and analysis

Datricks solution, on the other hand, can connect to any financial record system and extract vast amounts of data seamlessly, mapping the financial and logistics processes in less than five days. This means that the organization’s financial teams get an accurate and real-time view of their processes exactly as they occur.

The next stage in the auditing process is the analysis stage. It is done automatically using proprietary AI and Machine Learning technology.

Financial teams can create queries with unlimited filtering options on a visual dashboard and get instant responses and customizable insights. For example, filtering a query showing all POs created after any goods have been ordered and billed by a vendor.

Investigate individual cases

Once the data is filtered, finance teams can discover the reasons and origin of Maverick Buying and other deviations that account for material weaknesses, for example actual Segregation of Duties (SoD) violations. Datricks uses root cause analysis to pinpoint and trace back to the person or vendor responsible for the problem and act upon it in real-time. 

We know you have no time for drilling and filtering

Imagine receiving insights and alerts straight into your inbox! Datricks does just that.

We improve through our customers. Our first customers loved our visual dashboards and the filter queries, but truth be told, their feedback conveyed they’d prefer to just get the info we detected as anomalies/deviations. We went ahead and built another layer to our solution, providing an easily accessible inbox with all alerts and insights already neatly presented and prioritized according to risk levels. This allows finance teams to review and respond, if needed, immediately. 

Automation all the way

The Datricks philosophy is hyper-automation. Anything one can automate to make life easier with a click of button, we do. Datricks Insight-to-Action feature allows companies to automatically block risks such as Maverick Buying, in real-time, even if the process would have allowed it. It puts the control back in the company’s hands for all process steps.

Today, Maverick Buying needs to be one of the greatest concerns of a financial team, not only because of the waste cost involved in such cases but also because some of these cases might lead to lengthy lawsuits and, therefore, severe reputational damage.

Advanced technology tools allowing real-time zoom-in, swift analysis, and customizable results dashboards are the latest solutions providing protection from Maverick Buying and escalating the organization’s, especially the procurement department’s, efficiency and growth.

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