Spend Visibility and a Ninety-Day Plan for Purchasing

Spend Visibility and a Ninety-Day Plan for Purchasing

In part six the route was completed: payment got a schedule approved once, a change to a supplier's bank details got two steps and a log, and every supplier's statement got a monthly reconciliation that explains every difference. With that, every riyal that goes to a supplier has a complete trail you can follow from its end back to its start: an approved request, a purchase order, a documented receipt, a matched invoice and a scheduled payment.

One question remains, the one an owner or finance manager asks and, in most companies, cannot get a quick answer to: how much are we spending, on what, with whom, and how much have we promised that has not arrived yet? This last part is about turning the chain we built into one view of spend, and then about a ninety-day plan to put every part of the series in place, in an order that never stops the buying for a single day.

Spend visibility: a live view, not a monthly project

In most companies, knowing what you spend is a project that repeats. The owner asks for a picture of purchasing, so the accountant gathers invoices from email, payments from the bank statement and purchase orders from a file kept by the purchasing officer, then spends days standardising supplier names and classifying invoices by hand. A spreadsheet is a good tool for that work, but the report arrives after the month it describes has gone, and the same effort starts again the following month.

When every purchase passes through the stations we built, each document carries from birth the data the report needs: the request number that links it to everything before and after it, the supplier's single identifier, the project, site or property the cost belongs to, and the purchase category. Nobody has to gather anything at month end, because the classification happened at the moment of the request, not after the invoice. Spend visibility is then not a report someone builds but a view you open, showing data as of now, and you can turn it along four axes:

• By supplier: how much we bought from each supplier, how much is still open with it on orders not yet complete, and how many of its invoices were held on a difference, and why.
• By category: building materials, spare parts, raw materials, maintenance services, consumables, or whatever split suits your company. What matters is that the categories are a short list the owner approves and the requester picks from, not free text every employee writes their own way.
• By project, site or property: what was charged to each contracting project, production line, residential tower or hotel. This is the field we made a condition of the purchase request back in part two.
• By stage: what we have committed, what has been invoiced and what has been paid. This axis matters most, so we take it next.

Three numbers before any new commitment

Most purchasing reports start from the invoice, because it is the document that reaches accounts. But the invoice comes late: the money was promised on the day the purchase order went out, not the day the invoice arrived. So the owner needs three numbers side by side, for each project, site or property, and for each supplier:

• Committed: the balance of open purchase orders not yet invoiced. Materials ordered and not delivered, delivered and not yet invoiced, or work awarded to a subcontractor whose payment application has not come in.
• Invoiced: invoices received and matched but not yet paid, each with its due date worked out from the payment terms on the supplier record.
• Paid: what has actually gone out, in scheduled payment runs or as recorded urgent payments.

Comparing these three is the number an owner needs before signing the next commitment. In cost control and payment applications we compared each project's actual cost with what was priced in the bill of quantities, and in part three we added the layer of open orders. Here the picture is complete: a project whose invoices look comfortable against its budget may have committed nearly the whole budget in open orders. The invoiced figure, with its due dates, tells the finance manager how much cash leaves in the coming weeks, and the committed figure tells them what comes after that.

For the committed figure to be honest, it needs one discipline: an order whose remaining balance nobody is waiting for any more is closed with a written reason, as we said in part three. A forgotten open balance inflates commitments on screen, and the owner postpones a sound decision in the belief that the money is already spoken for.

Questions the view answers in a minute

In most companies these questions can be answered from spreadsheets, but only after days of gathering, and often after the decision that needed the answer has passed. When purchasing runs through the chain, the view answers them in a minute:

• Who are our largest suppliers really, once duplicate names are merged? In part three we put every supplier record on the unified national number and merged the duplicates. Only then does the true ranking appear: a supplier whose spend was split across three names may be the largest one you deal with. That matters at the negotiating table, and it matters more when you realise that this supplier stumbling could stop more than one site.
• How much have we committed that has not been invoiced? For every project, site and property, and for every supplier, without anyone calling the purchasing officer to ask which orders went out.
• Which categories are bought outside purchase orders? An invoice that arrives with no purchase order shows up in the invoice inbox with its category and department. If that keeps happening in one category, it usually does not mean someone bypassed the process. It means the process does not fit that category: consumables bought every week need a price agreement with successive orders issued under it, not a full round of quotes every time.
• Where is urgent buying most common? The share of requests that went through the urgent route at each site or department. As we said in part two, it points to planning or to slow approval, not to anyone's failing.
• Which suppliers' invoices are held most often, and why? The quantity and price differences that three-way matching stops in part four, grouped by supplier and reason. A supplier whose differences keep recurring needs a conversation. A difference that recurs with every supplier at one site needs a look at receiving there.
• How does the price of the same item move? The unit price on successive purchase orders for the same item, from the same supplier and from others. This is only possible if the item has one code, which is the same rule we applied to suppliers.

Where AI comes in

Once the chain is in place, AI has real work to do in purchasing: reading supplier invoices that arrive as a photo or a scanned page and turning them into data instead of retyping them, flagging a unit price that is out of the ordinary for that item, or an invoice that resembles one already recorded under a similar supplier name, and then the demand forecasting we covered in AI in procurement and inventory.

But that payoff comes after the chain, not before it. Flagging an unusual price needs a usual price to measure against, which means purchase orders recorded against one item code. Catching a duplicate invoice needs each supplier to have one record. AI running on top of one supplier under three names and invoices without purchase orders is comparing noisy data with noisy data. And an alert stays an alert: it raises the case with its owner, and a person makes the decision.

The Origami view

When we build the purchasing cycle for a company, we build spend visibility at the end, not the beginning. The view reads what the stations before it produce, and a dashboard built before the records are in order gives neat, wrong numbers, so the owner loses trust in it and goes back to asking for a manual report. So we start with the supplier register, the purchase categories and the project field on the request, then build each station on the one before it.

We build the whole cycle around how the company actually buys: who requests from site, who approves from their phone, and how supplier invoices arrive. It connects to the accounting system the company already runs on and to e-invoicing, rather than replacing them. This is part of the custom systems we build, described in our services.

A ninety-day plan in an order that never stops the buying

The common mistake is trying to switch on the whole cycle in one day. The order that protects day-to-day buying is the one we set out in what moves first: static data first, then transactions. Each stage can also start at one site or department before it rolls out across the company.

• Month one: the supplier register, the approval matrix and the purchase request. The supplier register is cleaned and put on the unified national number, duplicate records are merged, and each supplier gets its VAT number after the two official checks from part three, its payment terms, and its IBAN from an official letter. The owner sets the approval matrix limits, the list of purchase categories and the conditions for the urgent route. Then purchase requests start from the phone, with approval on the request itself. Orders, receiving and payment run as before this month, so nothing stops.
• Month two: the purchase order and documented receiving. Purchase orders are issued from approved requests before delivery, receipts are recorded at the gate or on site against the order line, and completion records are approved for subcontractors and services. The most important step this month is entering the open orders issued before the system as opening balances; otherwise the committed figure starts short from its first day.
• Month three: the invoice inbox, matching, the payment run, statement reconciliation, then the spend dashboard. One address is set for supplier invoices, three-way matching runs on every invoice, the scheduled payment run begins, and statements from the largest suppliers are reconciled first. At the end of the month, once every station is producing its data, the spend view is switched on.

Each stage has a declared end for the old route, set by the owner: from a given date no order is issued except from an approved request, and from another date no invoice is paid until it is matched, except what goes through the recorded urgent route. Without a declared date both routes carry on side by side, and the easier one wins. At the end of each month, review three indicators you read from the system itself: how many requests went through the system, how many invoices arrived with a purchase order, and how many invoices were held and why. The direction of those numbers from month to month is more honest than any target you set at the start.

As for what existed before the system, the files, emails and paper, none of it is deleted after the move. Article 66(1) of the VAT Implementing Regulations requires a taxable person to keep the invoices, records and accounting documents it must maintain for at least six years from the end of the tax period they relate to, with a longer period for records on capital assets set in the same paragraph. So the old archive stays kept and accessible, the new system starts from its opening balances, and anything specific to your company's case is a question for your accountant or tax adviser.

Closing the series

Over seven parts we walked the purchasing cycle station by station: we mapped the seven stations and their usual breaks, then the purchase request and the approval matrix, then the verified supplier record and the binding purchase order, then documented receiving and three-way matching, then what to check on a supplier invoice before claiming its VAT, then scheduled payment and statement reconciliation, and finally spend visibility and the plan to put it all in place.

The point worth keeping: digitizing purchasing is not distrust of the people who buy. It means every riyal that goes to a supplier has a written route that protects whoever requested, approved, received and paid, and gives the owner a picture to decide on before committing, not after paying. The start is a small step you can take this week: ask for the list of purchase orders open right now, and ask how many of them anyone is still actually waiting for.

Sources

• VAT Implementing Regulations, Zakat, Tax and Customs Authority (official Arabic text) — Article 66(1) (keeping invoices, records and accounting documents for at least six years from the end of the tax period they relate to, and a longer period for capital-asset records).
• Zakat, Tax and Customs Authority: VAT registration verification service (Arabic) — search by VAT number, commercial registration number or VAT certificate number; the service is free and open to taxpayers and the public.
• Ministry of Commerce: commercial registration enquiry service (Arabic) — search by business name or the business's unified national number; the service is instant and free.