What is the recommended best practice for Financial Settlement based on Procurement Cost?

The recommended best practice for Financial Settlement based on Procurement Cost involves monitoring and evaluating Accounts Payable (AP) processes. This approach ensures that AP managers can identify inefficiencies, track spending against budgets, and ensure adherence to internal controls and compliance requirements. By continuously reviewing these processes, managers can enhance the accuracy of financial settlements and optimize cash flow management.

Monitoring and evaluating AP processes encompasses a range of tasks, including assessing the effectiveness of invoice processing, reconciliation of purchase orders with received goods or services, and tracking payment terms adherence. This comprehensive oversight enables teams to uncover trends and areas requiring improvement, which ultimately contributes to more strategic decision-making in procurement.

In contrast, solely focusing on entering invoices, speeding up the entry of invoices, or conducting audits—while certainly important activities—do not foster the same level of ongoing improvement and process optimization that monitoring and evaluating provides. Engaging in a more holistic review leads to better financial control and enhances the overall efficiency of procurement practices.