Sachin Sharma, founder of ProcureDesk, explains how to enforce a no-PO/no-pay policy. While 73% of growing companies have the policy, only 23% measure compliance. He recommends eliminating approval bottlenecks, creating a clear emergency-exception process, maintaining continuous communication, and rewarding departments that follow the policy, which can boost compliance by 30% or more.
In a recent survey, we found 73% of growing companies have a no PO, no pay policy. However, only 23% have any sort of compliance or they're measuring compliance to that policy. Now, if your AP team has recently launched a no P or no pay policy and you're struggling to enforce it, this video is for you. Because I'll break down three simple strategies that you can implement today to increase the compliance rate and stick till the end, where I will share one tip that most companies overlook. And just implementing that can increase your compliance rate by at least 30%. Now, if you're joining me for the first time, welcome. My name is Sachin Sharma. I am the founder of procuredesk, where we help growing companies control spending through automation of procurement in AP processes. So let's start. Number one is avoiding the approval bottleneck. Number one problem. When you have a no po, no PA policy, you want to ensure that all the invoices are mapped to a purchase order. The challenge is most companies don't have a central process to capture the purchase orders and invoices. So now what happens is there is no way to kind of easily match that and you are digging up old emails to figure out, hey, do we have a PO that matches the invoice? That slows down the entire process. So it's best to define a approval exception or approval process upfront. In terms of, okay, first of all, how are we going to match the invoices to purchase orders, have a central place or a system like procuredesk. But second is if there's an exception, who's going to approve that? Right? So define that upfront. Number two is define a process for emergencies. You set up a process with good exception or good intention over a period of time. People have emergencies, right? I just need it now. This is one time or, you know, this is emergency purchase. It all happens, right? All the time. The problem is over a period of time, that becomes the norm. And your policy have no teeth now, Right? So that is one of the reasons why all these processes fail because you don't define upfront the exception process. So what does exception looks like? Okay, if we need to make an emergency purchase, we can go without a po, but here are the conditions. So you're upfront looking at when do you need a emergency exception Process number three is communication breakdown. We often see that you communicate it once and then forget, right? So your AP team send an email and say, we are implementing this policy, but it needs continuous reinforcement. You need to at least communicate a couple of times, especially in the beginning, and add it to your employee handbook to make sure that new employees are aware of that. Right? So those are three simple strategies. Now this one tip which I mentioned about in the beginning. So most companies do this, they basically send a non compliance notice, right? So AP teams will look at who is not complying to the policy within the department, send them an email and that is fine. Sometimes you do that, but why don't do the reverse of that? So instead of sending an email saying non compliance, why don't send an email at least noticing or you know, rewarding those employees who are following the process? It could be a simple email highlighting these departments have the highest compliance rate to no pay policy. So what that does is others start seeing that and they know that oh, I'm the only one who's not falling and and immediately start falling in line. We have seen tremendous result by just this one simple trick. So those were just to recap. Three strategies to make sure your no peer, no PA policy can be implemented without drama. Number one is make sure you have the approval process pox matching process defined up front. Define a process for emergencies. Number three is communicate often. If you like this video, feel free to hit the subscribe button so you get notified when we release videos like this. Thank you for joining me today and I'll see you in the next video.
