Note: Descriptions are shown in the official language in which they were submitted.
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METHOD AND SYSTEM FOR ORGANIZING VENDOR INFORMATION
TECHNICAL FIELD OF THE INVENTION
This invention relates generally to financial
information processing and, more particularly, to a method
and system for organizing vendor information.
BACKGROUND OF THE INVENTION
As computers have become more important in today's
society, many organizations use computerized accounts
payable systems for increased efficiency and decreased cost.
However, for large organizations, existing accounts payable
systems have provided minimal business intelligence
regarding expenditures on an organization-wide basis. Thus,
it is difficult for a large organization to track how much
it spends with a particular vendor or for particular classes
of goods and services. The problem is magnified when the
organization is multinational as different currencies may be
used for payment and different accounts payable software may
be used. Large organizations often try to decrease the cost
of goods and services they purchase, but often lack the
business intelligence regarding global expenditures by the
organization that may be helpful in large scale cost cutting
programs.
In addition, while accounts payable systems may provide
some information about particular vendors, information about
related vendors is minimal. More specifically, existing
accounts payable systems typically lack flexible tools for
organizing the vendors from whom items are purchased. Where
multiple vendors are related to one another, existing
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systems do not provide the flexibility to view expenditures
for multiple vendors grouped together.
SUMMARY OF THE INVENTION
One aspect of the invention is a method for organizing
vendor information comprising receiving data comprising a
plurality of accounts payable items. Each accounts payable
item has an associated vendor name and the vendor name
representes a business associated with a purchase
transaction represented by the accounts payable item. Ones
of the accounts payable items are associated with a first
vendor name. The method further comprises associating a
first vendor identifier and a second vendor identifier using
a computer with ones of the accounts payable items
associated with the first vendor name.
The present invention provides important technical
advantages. Various embodiments of the invention may have
none, some, or all of these advantages. The invention
allows accounts payable items to be organized and reports to
be generated in response to any of the purchaser of the
item, the vendor from whom the item is purchased, a category
and sub-category associated with the item, by groupings of
the purchasers of the item and by groupings of the vendors
of the item. The invention also allows relationships to be
defined between owners and subsidiaries of the vendors and
between the purchasers of the items.
BRIEF DESCRIPTION OF THE DRAWINGS
A better understanding of the present invention will be
realized from the detailed description that follows, taken
in conjunction with the accompanying drawings, in which:
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FIGURE 1 illustrates one embodiment of a global
purchasing information system constructed according to the
present invention;
FIGURE 1A illustrates one embodiment of a general
purpose computer useable with the system of FIGURE 1;
FIGURE 2 illustrates further details of the global
purchasing information system of FIGURE 1;
FIGURE 3 is a flow chart illustrating one example of a
method for tracking purchasing information;
FIGURE 4 is a flow chart illustrating details of one
example method of configuring the system of FIGURE 1;
FIGURE 5 illustrates a vendor alignment tool module
that may be used in one embodiment of the invention; and
FIGURE 6 is a block diagram illustrating an example of
the operation of the vendor alignment tool module of FIGURE
5.
DETAILED DESCRIPTION OF THE DRAV~1INGS
The preferred embodiment of the present invention and
its advantages are best understood by referring to FIGURES
1-6 of the drawings, like numerals being used for like and
corresponding parts of the various drawings.
FIGURE 1 is a block diagram illustrating an example of
a global purchasing information system 10. System 10
comprises a global purchasing information repository (GPIR)
12 operable to receive a plurality of accounts payable data
items 14 and to communicate with a data preparation
application 16, a plurality of regional servers 18, one or
more account servers 19, a GPIR application 20 and an
interface 22 linked to communication links 24. Some of
these components could be omitted or other components added
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to complement the functions described below without
departing from the scope of the invention.
GPIR 12 comprises any suitable combination of hardware
and software operable to provide database functionality.
GPIR 12 stores accounts payable data items 14 for use by
data preparation application 16, servers 18, GPIR
application 20 and interface 22. In one embodiment, GPIR 12
comprises an Oracle database executing on a server computer:
However, any type of database may be used such as a
relational, object, or hierarchical database without
departing from the scope of the invention. Note that GPIR
12 can also be implemented as a distributed system without
departing from the scope of the invention.
Each accounts payable data item 14 may comprise
accounts payable information indicating one or more
purchased items, a cost 32 for the item in a local currency,
a cost center 30 within an organization that purchased the
items,~a vendor name 34 to whom the amount is owed, a date
of payment (not explicitly shown), an account 35 and an item
description 36. Multiple items 14 may be generated to
represent individual line items from purchase orders with
multiple distinct line items. Items 14 are associated with
goods, services and other items which are purchased by cost
centers 30 associated with users of system 10. In addition,
a general category of goods may be included. (Not
explicitly shown) Some of the data could be excluded or
other data included without departing from the scope of the
invention.
Users of system 10 may comprise a company using system
10 to track expenditures related to the company, a company
using system 10 to track expenditures related to the company
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and one or more subsidiary companies, a company using system
to track expenditures for one or more unrelated companies
which are cooperating, such as an industry consortium, a
third-party tracking expenditures for one or more client
5 companies which have contracted for service from the third-
party, and other types of entities and organizations. In
general, a user of system 10 may be any organization or
group of organizations tracking the expenditures of one or
more companies or portions of companies for any reason.
10 Data preparation application 16 utilizes items 14
stored in GPIR 12 to organize and~format items 14 for use by
GPIR application 20 and interface 22. More specifically,
items 14 received by GPIR 12 may be organized in different
formats by different account servers 19 and data preparation
application 16 reformats the different formats into either a
single format or into one of a plurality of standard formats
for use by GPIR application 20 and interface 22.
Alternatively, GPIR application 20 and interface 22 could be
designed to handle disparate data formats directly. Data
preparation application 16 is also operable to reformat
information from regional servers 18 into the single format
or plurality of standard formats.
Regional servers 18 comprise purchasing information
repositories associated with particular geographic regions,
particular divisions or subsidiaries of a company,
particular facilities of a company, or any other logical
division of purchasing information tracking. In one
example, the regional purchasing information repositories
store accounts payable items 14 for particular geographic
areas. For example, a regional server 18 may be associated
with Latin America, another with Europe, and a third with
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Asia. Regional servers 18 utilize one or more server
computers to support the purchasing information repositories
and communicate accounts payable items 14 to GPIR 12.
Account servers 19 are associated with cost centers 30
and handle items 14 for the associated cost centers 30.
Account servers 19 communicate items 14 to GPIR 12 for cost
centers 30. Different account servers 19 could also be used
for different classes of goods or services, for accounts
using different currencies, etc. In other words, different
account servers 19 can be used to divide accounts payable
tasks into any logical organization.
GPIR application 20 is associated with GPIR 12 and is
executed by one or more computers. GPIR application 20 is
operable to generate one or more reports in response to
accounts payable items 14, sort accounts payable items 14
and perform other operations associated with GPIR 12. An
example of GPIR application 20 is described in greater
detail in association with FIGURES 2-4. GPIR application 20
may further include vendor alignment tool (VAT) module 23
which is described in more detail in association with FIGURE
5.
Web interface 22 comprises a user interface for use by
users of system 10 to access GPIR 12 over a World Wide Web
(WWW) network connection. In this embodiment, interface 22
supports access and retrieval of data in GPIR 12 using a web
browser (not shown). GPIR 12 may be accessed by any method,
however, without departing from the scope of the invention.
Communications links 24 may comprise Local Area
Networks (LAN), Metropolitan Area Networks (MAN), Wide Area
Networks (WAN), the Internet, optical links, satellite
links, or other suitable data communications links or
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networks operable to support communication of data between
computer systems.
Cost centers 30 comprise data indicating the
department, group, project, or other billing entity which
purchased item 14. Note that item 14 can represent a single
item or a group of items. Cost 32 comprises an indication
of the price of item 14 in a particular currency.
Description 36 comprises a description of item 14, such as
"pen", "bond paper", "computer monitor", "office supplies"
or other textual descriptions appropriate for the item or
items in question. Note also that items 14 may comprise
purchased services as well. Account 35 indicates the
specific budget or purchasing account which paid for item
14 .
In operation, account servers 19 and regional servers
18 respectively generate one or more accounts payable items
14. Accounts payable items 14 are then transmitted to GPIR
12 in real time, at random intervals, or at predetermined
intervals. In one embodiment, accounts payable items 14 are
communicated to GPIR 12 at the end of each business day, but
other times may also be set for communication of items 14 to
GPIR 12 when communication occurs at predetermined
intervals. V~lhere a multinational corporation is involved,
communication to GPIR 12 may occur at many different times.
Data preparation application 16 reformats items 14 received
by GPIR 12. More specifically, various servers 18 and 19
may use different formats for items 14 while GPIR 12 uses a
single format or group of formats for storing accounts
payable items 14. Data preparation application 16 converts
the accounts payable items 14 from the format used by
servers 18 and 19 to the format or formats used by GPIR 12.
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As noted above, such conversion is optional and servers 18
and 19 could communicate items 14 in a recognized format or
GPIR 12 could be designed to recognize many different
formats .
GPIR application 20 associates a category, a vendor
identifier, and a reporting structure identifier with each
accounts payable item 14 as described in more detail in
association with FIGURE 2. GPIR application 20 may also
generate various reports, such as an expenditure report, a
vendor report and others, in response to accounts payable
items 14 which may be sorted by various criteria.
FIGURE 1A illustrates an embodiment of a general
purpose computer 37 that may be used with system 10. More
specifically, computer 37 may be used for any of servers 18
and 19, and to support GPIR 12, data preparation application
16 and interface 22. General purpose computer 37 may be
adapted to execute any of the well-known MS-DOS, PC-DOS,
OS/2, UNIX, MAC-OS, mainframe, minicomputer and Windows
operating systems or other operating systems. General
purpose computer 37 comprises processor 38, random access
memory (RAM) 39, read only memory (ROM) 40, mouse 41,
keyboard 42, and input/output devices, such as disk drives
43, printer 44, display 45 and communications link 46. The
present invention includes programs that may be stored in
RAM 39, ROM 40 or disk drives 43 and may be executed by
processor 38. Communications link 46 is connected to link
24 and could be connected via a telephone line, an antenna,
a gateway or any other type of communication link. Disk
drives 43 may include a variety of types of storage media
such as, for example, floppy disk drives, hard disk drives,
CD-ROM drives, optical drives or magnetic tape drives.
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Although one embodiment may employ a plurality of disk
drives 43, a single disk drive 43 could be used without
departing from the scope of the invention. FIGURE 1A only
provides one example of a computer 37 that may be used with
the invention. The invention could be used on computers
other than general purpose computers, as well as on general
purpose computers without conventional operating systems.
FIGURE 2 is a block diagram of one example embodiment
of GPIR 12. GPIR 12 may include a database 50 supported by
a database server 52. Database 50 stores accounts payable
items 14 and the associated cost center 30, vendor name 34,
cost 32, a global company currency 49 and description 36.
Database 50 also stores a category 54 and one or more
associated subcategories 55, a vendor identifier 58 and a
reporting structure identifier 56 associated with items 14.
Information about reporting structure groups 60 and vendor
groups 62 may also be stored in database 50. A reporting
structure group 60 associates groups of reporting structure
identifiers 56 and a vendor group 62 associates groups of
vendor identifiers 58. Database server 52 comprises any
suitable hardware and software operable to support database
50 at GPIR 12. Although this'embodiment uses any type of
database to store the information, other types of storage
could be used such as a flat file. As noted above more or
less items of data may be included without departing from
the scope of the invention.
Global company currency 49 comprises a representation
of cost 32 in a predefined currency. Currency 49 is
generated in response to cost 32 using standard currency
exchange rate conversion methods. In one embodiment, global
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company currency 49 comprises U.S. dollars, but any currency
may be used.
Category 54 comprises an indication of a category
associated with item 14. Category 54 may specify any
5 suitable category desired by a user of GPIR 12. Category 54
may be determined for item 14 in response to description 36.
Categories 54 may indicate, for example, computer services,
computer equipment and office supplies. Categories 54 thus
may be more general descriptions of an item 14 or collection
10 of items 14. Categories 54 may have one or more associated
sub-categories.
Sub-category 55 comprises more detailed category
information associated with item 14. Sub-categories 55 are
associated with categories 54. Sub-categories 55 for an
item 14 may be determined in response to account 35 or
based on any other criteria, such as human input or
description 36. One or more accounts 35 may be associated
with sub-categories 55. For example, category 54 may
specify "legal services",while one associated sub-category
55 may specify "legal services - patent" and another sub-
category may specify "legal services - corporate." For
another example, one account 35 may indicate "letterhead
laser printer paper" and another account 35 indicate
"letterhead copier paper" which may be associated with a
sub-category 55 indicating "office supplies - letterhead
paper." In general, any organization of categories 54 and
sub-categories 55 may be used by a user of system 10.
Reporting structure identifier 56 comprises an integer,
alphanumeric or any other type of identifier associated with
item 14 based on the cost center 30 associated with item 14.
A single reporting structure identifier 56 may be associated
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with multiple cost centers 30. Also, a single cost center
30 may have multiple associated identifiers 30. In one
embodiment, a particular cost center 30 may have one
identifier 56 uniquely associated with that particular cost
center 30, while other identifiers associated with cost
center 30 indicate regional, organizational, departmental
and other sets of cost centers 30 to which the particular
cost center 30 is related to. For example, a particular
cost center 30 may be "Company A Texas" and have a unique
associated identifier 56 which identifies the cost center 30
as "Company A Texas." The particular cost center 30 may
also have distinct associated identifiers 56 which indicate
that "Company A Texas" is a subsidiary of "Company A
Southwest", "Company A U.S." and "Company A Worldwide." An
organizational chart associated with "Company A Texas" may
show that "Company A Texas" is a subsidiary of "Company A
Southwest" which is a subsidiary of "Company A U.S." which
is a subsidiary of "Company A Worldwide." Thus, five
distinct identifiers 56 may be associated with the exemplary
"Company A Texas" cost center 30, one identifier 56
indicating the cost center itself, and other identifiers
indicating other, more general business units which "Company
A Texas" belongs to. The other business units are not
restricted to owner/subsidiary relationships and may
comprise any business relationship, such as departments and
divisions within a company. The multiple identifiers 56
provide the capability to group cost centers 30 in numerous
ways in response to the business needs of a user of system
10. In general, one or more identifiers 56 may be
associated with a particular cost center 30 indicating any
organizational or other structure used by a user of system
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10. Any number of identifiers 56 may be associated with an
item 14.
Reporting structure group 60 comprises data or a data
structure for grouping one or more reporting structure
identifiers 56. Groups 60 may indicate associations between
cost centers or reporting structure identifiers 56 other
than those indicated by identifiers 56. For example,
multiple unrelated cost centers 30 may be grouped by their
associated identifiers 56 into a "technology buying group."
Groups 60 may be used to group cost centers 30 when details
are not important. For example, if a business has ten cost
centers 30 for different types of legal work, but only wants
to see the total amount spend on all legal work, the legal
cost centers 30 may be grouped into a legal group 60.
Buying groups 60 may also usefully pool their buying power
to obtain better prices for goods and services. The
invention facilitates group purchasing by allowing data to
be aggregated for an entire reporting structure group 60.
Groups 60 may be used by a user of system 10 to organise and
relate groups of identifiers 56 in response to the business
information needs of the user of system 10~.
Vendor name 34 comprises an alphanumeric indication of
the name of the vendor associated with item 14. Vendor
identifier 58 comprises an integer, alphanumeric value or
any other type of identifier for identifying vendor name 34.
Vendor identifier 58 may be associated with multiple vendor
names 34. Also, multiple vendor identifiers 58 may be
associated with a single vendor name 34. In one embodiment,
a particular vendor name 34 may have one identifier 58
uniquely associated with that particular vendor name 34,
while other identifiers associated with vendor name 34
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indicate regional, organizational, departmental, subsidiary,
ownership, joint venture, partnership and other sets of
vendor names 34 to which the particular vendor name 34 is
related to or owned by. For example, a particular vendor
name 34 may be "Company B Texas" and have a unique
associated identifier 58 which identifies the vendor name 34
as "Company B Texas." The particular vendor name 34 may
also have associated identifiers 58 which indicate that
"Company B Texas" is owned by "Company B Southwest" which is
owned by "Company B U.S." which is owned by "Company B
Worldwide." An organizational chart associated with
"Company B Texas" may show that "Company B Texas" is a
subsidiary of "Company B Southwest" which a subsidiary of
"Company B U.S." which a subsidiary of "Company B
Worldwide." Thus, five distinct identifiers 58 are
associated with the exemplary "Company B Texas" vendor name
34, one identifier 58 indicating the vendor name 34 itself,
and other identifiers indicating other business units which
"Company B Texas" belongs ta. The multiple identifiers 58
provide the capability to group vendor names 34 in numerous
ways in response to the business needs of a user of system
10. In general, one or more identifiers 58 may be
associated with a particular vendor name 34 indicating any
organizational or other structure associated with the
vendors with whom a user of system 10 deals. This feature
of the invention facilitates an examination of the total
goods and services purchased from a group of related
vendors. A cost center 30, user of system 10, purchaser or
reporting structure group 60 may use such information to
bargain for better pricing or service. Any number of
identifiers 58 may be associated with an item 14.
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Vendor group 62 comprises an integer, alphanumeric or
any other type of identifier for grouping multiple vendor
identifiers 58. Vendor groups 62 may organize vendor
identifiers 58 which have no significant business
relationship, but are related in some other way. For
example, vendor groups 62 may associate vendor identifiers
58 of vendors in the same industry, geographic location or
based on other criteria. Groups 62 may also be used to
group vendors when details regarding the vendors are not
important. For example, if a business has ten vendors
providing different types of legal work, but only wants to
see the total amount spent on .all legal work, the vendors
providing legal services may be grouped into a legal
services group 62. This feature of the invention may
facilitate an examination of the total goods and services
purchased from vendors based on industry, type of good or
service or other criteria. A cost center 30, user of system
10, purchaser or purchasers may use such information to
bargain for better pricing.
In operation, GPIR application 20 uses criteria 70 to
determine how to associate items 14 with one or more
categories 54, sub-categories 55, reporting structure
identifiers 56, and vendor identifiers 58. GPIR application
20 also uses criteria 70 to determine the associations
between vendor names 34 and vendor identifiers 58, between
vendor identifiers 58 and vendor groups 62, between cost
centers 30 and reporting structure identifiers 56, and
between reporting structure identifiers 56 and reporting
structure groups 60. Criteria 70 comprises information used
to generate relationships between names 34, identifiers 58,
cost centers 30, identifiers 56 and 58, and groups 60 and 62
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from any source. For example, criteria 70 may be generated
by a user of system 10 to represent business information
associated with the user.
Category 54, sub-categories 55 and items 14 may be
5 associated using information about item 14 in description
36. For example, categories 54 may include office supplies,
consulting services, and computer equipment while sub
categories 55 may include "office supplies - pens",
"consulting services - legal" and "computer equipment
10 monitors." Criteria 70 may associate items 14 which are
accounts payable items for hard drives with the computer
equipment category 54 and "computer equipment - hard drives"
sub-category 55 while paper clips and pens are associated
with the office supplies category 54 and the respective sub-
15 categories 55 "office supplies - pens" and "office supplies
- paper clips." In general, using the information about
item 14 provided by description 36, criteria 70 may specify
any number of categories 54, sub-categories 55 and the
association between the categories 54 and sub-categories 55,
and items 14. Users of system 10 may establish such
criteria.
Reporting structure identifier 56 and one or more cost
centers 30 may be associated in order to organize cost
centers 30. More specifically, particular departments and
other parts of a corporation using system 10 may include
multiple cost centers 30 which are organized along different
lines. For example, a single corporation may have acquired
two other corporations which are now regarded by the
acquiring corporation as only two cost centers 30 while the
acquired corporations consider themselves as multiple cost
centers. Reporting structure identifier 56 may be
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associated with multiple cost centers 30 and multiple
identifiers 56 may be associated with a single cost center
30 in order to logically organize cost centers 30.
Reporting structure group 60 may be used to organize
one or more reporting structure identifiers 56. Particular
reporting structure identifiers 56 may be associated with
multiple reporting structure groups 60. For example, all of
the reporting structure identifiers 56 associated with cost
centers 30 in a particular geographic area may be grouped
into one reporting structure group 60. For another example,
reporting structure identifiers 56 associated with
particular types of cost centers, such as legal departments,
may be associated into a reporting structure group 60
associated with legal services.
Vendor identifier 58 may be associated with one or more
vendor names 34 and one or more vendor identifiers 58 may be
associated with a single vendor name 34. More specifically,
vendor identifier 58 provides fox the logical organization
of multiple vendor names 34 into a single logical entity so
as to more conveniently handle multiple vendor names 34
which are related or associated with each other. Also,
multiple identifiers 58 may be associated with single vendor
names 34 to identify hierarchical relationships between the
vendor name 34 and other vendor names 34. For example, a
first vendor name has an associated first vendor identifier,
and a second vendor name has a distinct associated second
vendor identifier. Also, the first vendor is a subsidiary
of a second vendor. The first vendor name may have both the
first and second vendor identifiers associated with the
first vendor name to indicate that the first vendor name is
a subsidiary of the second vendor name. The second vendor
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name could have only the second vendor associated with it
because the second vendor is not a subsidiary of the first
vendor. For another example, a single vendor may comprise
multiple subsidiary corporations with distinct vendor names
34 while a user associated with system 10 may associate a
single vendor identifier 58 with all the vendors names 34
associated with a single actual business.
Vendor groups 62 may be associated with one or more
vendor identifiers 58 in order to provide more convenient
organization of vendor identifiers 58. Particular vendor
identifiers 58 may be associated with multiple vendor groups
62. For example, vendor groups 62 may organize vendor
identifiers 58 by industry, cost center, and other suitable
criteria. Vendor groups 62 may also be used to group vendor
names when details of the vendor names are unimportant.
System 10 provides the capability to generate business
information regarding expenditures for businesses. The
business information may be used to assist the business in
decreasing expenditures, identifying waste, and negotiating
with vendors.
System 10 supports the collection and organization of
accounts payable items 14 for a plurality of regions and
cost centers associated with one or more businesses. A
business may use system 10 to generate a report 74
indicating expenditures and the report may be organized by
various information depending on the business need of the
business.
For example, reports 74 may be generated which are
organized by reporting structure identifiers 56. In this
example, a first reporting structure identifier is
associated with "Purchaser A Texas" and a second reporting
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structure identifier is associated with "Purchaser A
Southwest" wherein each of the first and second reporting
structure identifiers are distinct. A first report is
generated which is organized by the first reporting
structure identifier and a second report is generated which
is organized by the second reporting structure identifier.
Using these reports, a user of system 10 could determine
that the cost center "Purchaser A Southwest" is spending too
much and targets "Purchaser A Southwest" for cost reduction
efforts. Other reports 74 may then be generated for the
vendor identifiers 58 associated with the second reporting
structure identifier which has been targeted for cost
reduction efforts. In order to determine possible cost
savings measures, other reports 74 may be generated based on
vendors associated with "Purchaser A Southwest," as well as
related companies to "Purchaser A Southwest!! that may pool
their purchasing power.
Continuing the above example, respective first and
second vendor identifiers may be associated with "Texas
Services" and "Texas Supplies," and a third and fourth
vendor identifier may be associated with "Southwest
Industries" which owns both "Texas Supplies" and "Texas
Services." Both "Texas Services" and "Texas Supplies" are
also associated with the third vendor identifier because
"Texas Supplies" and "Texas Services" are subsidiaries to
"Southwest Industries." The fourth vendor identifier may
identify "Southwest Industries" uniquely. Reports 74
generated for "Purchaser A Southwest" may show that
"Purchaser A Southwest" purchases from many vendors
including "Southwest Industries," "Texas Supplies" and
"Texas Services'," but that none of these expenditures are
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particularly significant standing alone. However, the
reports 74 may show that total expenditures to "Southwest
Industries" and its subsidiaries are significant, The user
of system 10 may then use reports 74 to determine that
significant savings may be realized by negotiating discounts
with "Southwest Industries" due to is aggregate purchases
from "Southwest Industries" and its related companies.
Continuing to use the above example, a report 74 of the
total expenditures by "Purchaser A Southwest" excluding the
expenditures of "Purchaser A Texas" may be generated for a
user of system 10. In one embodiment, the report may be
generated by first finding all items 14 having the second
reporting structure identifier indicating "Purchaser A
Southwest" and placing them in a set. However, since items
14 associated with "Purchaser A Texas" also have the second
reporting structure identifier associated with them,
application 20 would then remove items 14 in the set which
have the first reporting structure identifier associated
with them. The set would then contain items 14 which have
only the second reporting structure identifier associated
with them.
In one embodiment, reporting structure identifiers 56
may be associated with each relationship between cost
centers 30. In this embodiment, and using the above
example, a third reporting structure identifier would be
associated with the relationship between "Purchaser A
Southwest" and "Purchaser A Texas." Items 14 associated
with "Purchaser A Texas" would then have the first reporting
structure identifier 56 associated with them to uniquely
identify the purchasing cost center 30, and would have the
reporting structure identifiers 56 associated with each
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relationship between "Purchaser A Texas" and related cost
centers, such as "Purchaser A Southwest," instead of having
the reporting structure identifier 56 associated with
"Purchaser A Southwest" associated with the items 14.
5 Similarly, a vendor identifier 58 would be associated with
each relationship between vendors.
In general, reports 74 may aggregate data for any
combination of cost centers 30, identifiers 56, groups 60,
categories 54, sub-categories 55 on the purchasing side over
10 any specified date range. This capability may be used to
generate reports 74 indicating expenditures across, for
example, the five cost centers making up a single facility
in order to negotiate price discounts for that facility.
For example, if reporting structure identifiers are
15 organized to group facilities, and groups 60 of facilities
are created for each region of facilities, then a report 74
may be generated showing expenditures on a regional basis.
Categories 54 and sub-categories 55 may be used to view
expenditures across particular product lines. For example,
20 reports 74 may be generated for a sub-category such as
"Office supplies - letterhead laser printer paper" for all
items 14 in that sub-category purchased by cost centers 30
associated with a particular group 60 or regional cost
center using identifiers 58. This flexibility allows a user
of system 10 to generate reports at numerous levels of
detail covering numerous different combinations of items 14.
Reports 74 may also aggregate data for any combination
of cost centers 30, identifiers 58, groups 62, categories
54, sub-categories 55 on the vendor side over any specified
date range. This capability may be used to generate reports
74 indicating expenditures across, for example, the five
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vendors supplying the category 54 of "Office supplies" to
the ten cost centers 30 making up a reporting structure
group 60 for the Texas region of a particular company.
Categories 54 and sub-categories 55 may be used to view
expenditures across numerous vendors at various business
levels. For example, a report 74 may be generated that
indicates expenditures for sub-category 55 of "Computer
equipment - keyboards" showing all vendors for all cost
centers 30. The report may show that while cost centers 30
individually spend small amounts on keyboards, that the
company as a whole may spend significant amounts on
keyboards. The report may also show that the amount spent
on keyboards is being spread amount six vendors. A user of
system 10 may use this information to negotiate a price
discount from one or more of the keyboard vendors for
particular cost centers 30 and/or the company as a whole.
In addition, any of the previously described reports 74
may be presented in the global company currency 49 or the
local currencies originally associated with items 14. This
provides flexibility to users of system 10 who are in
different countries, but are still part of the same company.
The capability to handle multiple currencies may allow users
of system 10 to negotiate with local vendors using the local
currency, and global vendors using the global company
currency 49. In addition, any combination of any of the
above data may be used with reports 74. Further, reports 74
may be sorted by any of the above data and may be sorted
multiple times, for example, a first sort by categories 54
and then sorting within the categories 54 by vendor
identifiers 58.
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For another example, by generating a report 74 sorted
by vendor groups 62, a business may determine that a total
of ~2 million per year is being spent on computer consulting
services from three vendors. The business may then use this
information to negotiate a discount from one of the three
vendors to provide all of the ~2 million of services for
$1.5 million. The business may use report 74 to leverage
the business's buying power to negotiate discounts and other
arrangements with vendors.
FIGURE 3 is a flow chart illustrating one example of
the use of system 10. The method begins at step 200 where
accounts payable items 14 are transmitted to GPIR 12 from
servers 18 and 19. Then, at step 202, items 14 are stored
at GPIR 12. Proceeding to step 204, the currency associated
with cost 32 may be converted to a predetermined global
company currency 49. The currencies are converted to
currency 49 in order to simplify the handling of items 14
and to allow for direct comparison of cost 32 between items
14 purchased in different currencies. In some embodiments,
this step can be omitted where items 14 already use a common
currency. In general, both the original currency and
currency 49 are stored with items 14 so that reports may be
generated in either of. the two currencies.
For example, a regional subsidiary of a multinational
corporation may generate items 14 in a local currency and
generate reports in the local currency. However, the
headquarters of the multinational corporation may use a
different currency 49 as the global company currency. As
system 10 supports both the local currency and currency 49,
both the headquarters and the regional subsidiary may work
with items 14 in their preferred currency. For
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multinational corporations with multiple regional or country
specific subsidiaries with distinct currencies, the
headquarters may use system 10 to review all expenditures in
the global company currency 49, while the subsidiaries
continue to use their local currency.
At step 206, items 14 are associated with categories 54
and sub-categories 55. More specifically, criteria 70 is
used to determine relationships between ones of items 14 and
one or more categories 54 and one or more sub-categories 55
based on details 36 associated with item 14. For example,
if details 36 indicates that item 14 is a computer monitor
then item 14 may be associated with the information
technology category, the "information technology - monitor"
sub-category, the office supplies category, and the "office
supplies - computer equipment" sub-category. In general,
criteria 70 may indicate any association of items 14 with
categories 54 and sub-categories 55 based on description 36.
Categories 54 and sub-categories 55 may also be manually
assigned by a user of system 10.
Then, at step 208, items 14 are associated with vendor
identifiers 58. Items 14 are associated with vendor
identifiers 58 based on criteria 70. More specifically, the
vendor name 34 associated with item 14 may be used to
determine which vendor identifiers 58 to associate with item
14. Associating vendor identifiers 58 with item 14 provides
increased ease in determining the vendors associated with
item 14. In one embodiment, a Dun and Bradstreet report may
be used to determine hierarchical and ownership
relationships between vendor names 34 and vendor identifiers
58 so that vendor identifiers 58 associated with parent
and/or subsidiary vendors of vendor name 34 are associated
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with item 14. For example, a large vendor may use multiple
subcompanies to provide different ~ types of items and
services, such as "company A consulting" and "company A
supplies". One vendor identifier may be used to indicate
that the two company names, "company A consulting" and
"company A supplies", are actually only one vendor. Also,
multiple vendor identifiers 58 may be used to indicate that
"company A consulting" is a subsidiary of "company A
industries" by also associating the vendor identifier 58
associated with "company A industries" with item 14.
Then, at step 210, items 14 are associated with
reporting structure identifiers 56. Based on criteria 70
and cost center information 30, items 14 are associated v,~ith
reporting structure identifiers 56. More specifically, for
accounting or other purposes, the purchaser of item 14 may
be indicated by reporting structure identifier 56. One
reporting structure identifier 56 may be associated with
multiple cost centers 30 based on criteria 70. Multiple
reporting structure identifiers 56 may also be associated
with item 14 to indicate the relationship of the cost center
associated with item 14 to other cost centers 30 and
business divisions.
Proceeding to step 212, vendor identifiers 58 are
associated with vendor groups 62. For example, a vendor
25 identifier 58 indicating company A which sells both office
supplies and computer consulting services, may be associated
with two vendor groups 62, one vendor group 62 for
consulting companies and another vendor group 62 for office
supply companies. Next, at step 214, reporting structure
30 identifiers 56 may be associated with reporting structure
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groups 60. Groups 60 and 62 may then be used, for example,
to determine total expenditures for the groups 60 and 62.
At step 218, one or more reports 74 may be generated.
Reports 74 are generated in response to requests from users
5 of system 10. More specifically, reports 74 are based on
information in database 50 and may comprise one or more
items 14 (or data aggregating multiple items 14) and any
combination of the associated vendor name 34, vendor
identifier 58, cost center 30, cost 32, description 36,
10 category 54, sub-category 55 and reporting structure
identifier 56. Reports 74 may be sorted by any of the
elements included in report 74.
Reports 74 may be used to negotiate with vendors. For
example, if report 74 is sorted by vendor identifier 58 and
15 shows that large numbers of purchases are made from a single
vendor, the report may be used to negotiate price
concessions from the vendor. Such negotiations could be
done by a buying group, an organization or subset of an
organization. In addition, if vendor identifier 58 is
20 associated with a plurality of related vendors in a vendor
group 62, report 74 may reveal that while relatively small
amounts are spent with individual vendors, as a group the
vendors provide a large amount of items and services. With
the additional knowledge provided by reports 74, the user
25 may be able to acquire significant price discounts from the
vendors as a group. In general, reports 74 may be sorted,
categories 54 and sub-categories 55 determined, identifiers
56 and 58 assigned and groups 60 and 62 determined in any
way to provide users of system 10 with knowledge of
expenditures associated with items 14 with respect to
vendors.
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Reports 74 may also be used to analyze expenditures.
For example, by sorting report 74 by category, the total
expenditures for one or more cost centers 30 in a particular
category may be determined. For another example, a user of
system 10 with many cost centers 30 may use reports 74 to
determine that duplicative services are being purchased by
cost centers 30. For yet another example, cost centers 30
which are spending more than other comparable cost centers
30 may be monitored to determine why the higher expenditures
are occurring. In general, reports 74 may be sorted,
categories 54 determined, groups 60 and 62 determined in any
suitable way to provide users of system 10 with knowledge of
expenditures associated with items 14 and cost centers 30.
FIGURE 4 is a flow diagram illustrating a method of
configuring system 10. At decisional step 308, new cost
centers 30 may be added to GPIR 12 by a user associated with
system 10 and administrators associated with servers 18 and
19. New cost centers 30 may be added to account for new
divisions, acquisitions, mergers, projects and other events
associated with the user of system 10. New cost centers 30
may be added prospectively (before items 14 associated with
the new cost center are received by GPIR 12)', or
retroactively (after items 14 associated with the new cost
center are received by GPIR 12) where already received items
14 may then be associated with the new cost center. If no
new cost centers 3 0 are to be added, then the NO branch of
decisional step 308 is followed to step 318. If new cost
centers 30 are to be added then the YES branch of decisional
step 308 leads to step 310. At step 310, new cost centers
30 are added to GPIR 12 using a user interface (not
explicitly shown) and, at step 312, a description may be
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associated with the new cost center 30. Also at step 310,
items 14 already communicated to GPIR 12 may be associated
with the new cost center 30. Proceeding to step 318,
existing descriptions associated with cost centers 30 may be
updated to represent changes associated with cost centers
30.
At decisional step 320, which. follows from step 306,
new categories 54 and sub-categories 55 may be added n
response to new accounts 35. New categories and sub-
categories may be added to provide new perspectives on
existing items 14 and accounts 35, to handle new types of
accounts 35 and for any other reason. In one embodiment,
new categories and sub-categories are added in response to
new accounts 35 associated with items 14. New categories 54
and sub-categories 55 may also be added prospectively to
handle expected new accounts 35. For example, a user of
system 10 may switch from internally providing computer
support services to using an outside contractor and a new
category 54 may be used to reflect external purchases of
computer services. Also, a new sub-category 55 may be added
to reflect the types of computer services purchased, such as
"computer services - network management." If no new
categories 54 or sub-categories 55 are to be added, then the
NO branch of decisional step 320 leads to step 326. If new
categories 54 or sub-categories 55 are to be added, the
method proceeds to step 322 where the user of system 10 may
add one~or more new categories and sub-categories. At step
324, the new categories and sub-categories defined in step
322 may be associated with descriptions 36 so that future
items 14 may be associated with the new categories and sub-
categories. Items 14 already received at GPIR 12 may also
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be associated with new categories 54 and sub-categories 55.
Then, at step 326, the information associated with the new
and existing categories and sub-categories may be updated.
For example, a new category of computer services may be
added and the information associated with the computer
services category may indicate that the category reflects
computer expenditures to an outside contractor while an
existing computer maintenance category is updated to
indicate that the computer maintenance category reflects
only internal computer expenditures.
At decisional step 330, which follows from step 306,
new vendor names 34 may be added. New vendor names 34 may
be added in order to accommodate new suppliers of goods and
services. New vendor names 34 may be added manually by a
human user of system 10 or automatically by data preparation
application 16 when new vendor names 34 are received by GPIR
12 in association with items 14. If no new vendor names are
to be added then the NO branch of decisional step 330 leads
to step 380. If new vendor names 34 are to be added, then
the YES branch of decisional step 330 leads to step 332. At
step 332, new vendor names 34 may be automatically added by
data preparation application 16. More specifically, data
preparation application 16 may add new vendor names 34 in
response to items 14 sent to GPIR 12 which have associated
vendor names 34 which have not been previously received at
GPIR 12. Data preparation application 16 may then add the
vendor names 34 to database 50 for association with vendor
identifiers 58. Also, a user of system 10 may manually add
new vendor names 34 to database 50.
At decisional step 340, which follows from step 306,
new vendor identifiers 58 may be added. Vendor identifiers
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58 may be added to indicate relationships between vendor
names 34, such as when multiple vendor names 34 are related.
If no new vendor identifiers 58 are to be added, then the NO
branch of decisional step 340 leads to step 346. If new
vendor identifiers 58 are to be added, then the YES branch
of decisional step 340 leads to step 342. At step 342, new
vendor identifiers 58 may be added to database 50 by a user
of system 10 using a suitable interface (not shown).
Then, at step 344, ones of the vendor identifiers 58
may be associated with one or more vendor names 34. In one
embodiment, external information, such as a Dun and
Bradstreet report, may be used to associate vendor names 34
with vendor identifiers 58. As vendor identifiers 58
indicate related vendors with different vendor names 34, the
Dun and Bradstreet report may be used to determine the
relationships. For example, a single major company may
supply goods and services to multiple cost centers 30
associated with a user of system 10 using multiple vendor
names 34. Vendor identifiers 58 provide an indication of
the relationship between the distinct vendor names 34 so
that the actual amount of expenditures related to all or a
portion of the single major company. Proceeding to step
346, descriptions associated with new and existing vendor
identifiers 58 may be updated to reflect new identifiers 58
and changes in existing identifiers 58.
At decisional step 350, which follows from step 306,
new reporting structure identifiers 56 may be added.
Reporting structure identifiers 56 may be added to indicate
relationships between cost centers 30, such as when multiple
cost centers 30 are located at a single geographic location
or represent similar departments (such as legal
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departments), or when multiple cost centers 30 have some
ownership or other business relationship. If no new
reporting structure identifiers 56 are to be added, then the
NO branch of decisional step 350 leads to step 356. If new
5 reporting structure identifiers 56 are to be added, then the
YES branch of decisional step 350 leads to step 352. At
step 352, new reporting structure identifiers 56 may be
added to database 50 by a user of system 10 using a suitable
interface (not shown) .
10 Next, at step 354, reporting structure identifiers 56
may be associated with cost centers 30. For example, a
single major company may have several cost centers, in a
given geographic location. Associating the multiple cost
centers 30 with a single reporting structure identifier 56
15 may allow, for example, multiple expenditures for the same
goods and services to be more easily detected. Also,
associating multiple identifiers 56 with a single cost
center 30 may be used to indicate organizational
relationships between the cost centers 30. In one
20 embodiment, cost centers 30 are associated with at least one
identifier 56 which uniquely identifies the cost center 30
while other identifiers may optionally be associated with
particular cost centers 30 to indicate relationships between
the cost centers. In general, any relationship,
25 informational goal or other suitable criteria may be used to
determine associations between cost centers 30 and
identifiers 56. Proceeding to step 356, descriptions
associated with new and existing reporting structure
identifiers 56 may be updated to reflect new identifiers 56
30 and changes in existing identifiers 56.
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At decisional step 360, which follows from step 306,
new vendor groups 62 may be added. ZTendor groups 62 may be
added to associate vendor identifiers 58 with each other
based on relationships between companies identified by
identifiers 58. In contrast to identifiers 58 which
typically group vendor names 34 of related vendors, vendor
groups 62 typically group vendors by criteria other than
whether the vendors associated with identifiers 58 have
ownership or business ties. For example, groups 62 may
group vendors by industry or size. Groups 62 may also be
used when details of vendors are unimportant and only group
information is desired. For example, hotel vendors may be
placed in a group 62 of hotels because only total hotel
expenditures are useful. In general, groups 62 may be used
to group vendors associated with identifiers 58 based on any
suitable criteria by the user of system 10 in order to
organize vendors or gain business insights into how
expenditures break down at a higher level than by vendor.
In addition, since identifiers 58 may be associated with
.multiple groups 62, different schemes may be used.
If no new vendor groups 62 are to be added, then the NO
branch of decisional step 360 leads to step 366. If new
vendor groups 62 are to be added, then the YES branch of
decisional step 360 leads to step 362. At step 362, new
groups 62 may be added to database 50 by a user of system 10
using a suitable interface (not shown). Then, at step 364,
groups 62 may be associated with identifiers 58. Proceeding
to step 366, descriptions associated with new and existing
vendor groups 62 may be updated to reflect new groups 62 and
changes in existing groups 62.
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At decisional step 370, which follows from step 306,
new reporting structure groups 60 may be added. Reporting
structure groups 60 may be added to associate reporting
structure identifiers 56 with each other based on
relationships between reporting structure identifiers 56.
In contrast to identifiers 56 which typically group related
cost centers 30, reporting structure groups 60 typically
group purchasers by criteria other than whether the
purchasers associated with identifiers 56 have geographic or
organizational relationships. Similar to vendor groups 62,
groups 60 may be used to group cost centers 30 when details
are unimportant and only total expenditures are needed. In
general, groups 60 are used to group purchasers associated
with identifiers 56 based on any criteria in order to
organize purchasers or gain business insights into how
expenditures break down at a higher level than that provided
by the identifiers 56. In addition, since identifiers 56
may be associated with multiple groups 60, different schemes
may be used to accomplish different goals.
If no new reporting structure groups 60 are to be
added, then the NO branch of decisional step 370 leads to
step 376. If new reporting structure groups 60 are to be
added, then the YES branch of decisional step 370 leads to
step 372. At step 372, new groups 60 may be added to
database 50 by a user of system 10 using a suitable
interface (not shown) . Then, at step 374, groups 60 may be
associated with identifiers 56. Proceeding to step 376,
descriptions associated with new and existing vendor groups
60 may be updated to reflect new groups 60 and changes in
existing groups 60.
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Next, at step 380, database 50 is updated with any
changes. The method then ends.
FIGURE 5 ~is a block diagram illustrating one example of
a VAT module 23. Module 23 operates to associate vendor
names 34 with vendor identifiers 58 and identifiers 58 with
groups 62. Module 23 may perform the associations manually
in response to human input 500 or automatically in response
to external information 502. External information 502 may
comprise any suitable information indicating relationships
between names 34 and identifiers 58. For example, a Dun and
Bradstreet report may comprise external information 502
indicating ownership relationships between vendor names 34.
An example is presented in FIGURE 5 to more clearly
illustrate the operation of module 23. Vendor name "A" is
associated with vendor identifier "AA", vendor name "B" is
associated with vendor identifier "BB", and vendor names "C"
and "D" are associated with vendor identifier "CC". Vendor
names "A" and "B" represent distinct companies with no
significant ownership or other business relationship.
Vendor names "C" and "D" are distinct from "A" and "B", but
are related to each other, such as being owned by a common
parent company or "C" owning "D" as a subsidiary. Vendors
"A" and "B" receive separate identifiers because they are
not significantly related to each other, while "C" and "D"
receive a single identifier because they are related.
Vendor group "AAA" is associated with identifiers "AA",
"BB" , and "CC" because, while vendors "A" , "B" , and "C" and
"D" may not have a business relationship, they are all
associated with the same industry. Vendor group "AAA." may
represent the computer consulting industry. Vendor group
"BBB" is associated with only identifier "CC". Group "BBB"
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may represent the computer hardware industry and identifier
"CC" represents a company or companies, such as "C" and "D"
who perform both computer consulting services and computer
hardware, while identifiers "AA" and "BB" provide only
computer consulting services.
In general, any suitable associations between o
identifiers 58, names 34 and groups 62 may be created by
users 500 based on business goals, information need or other
criteria. This flexibility allows users of system 10 to
create and utilise numerous relationships between vendors in
order to more clearly determine expenditures by the users of
system 10 or clients of users of system 10.
FIGURE 6 is a block diagram illustrating another
example of VAT module 23. Module 23 also operates to
associate vendor identifiers 58 with items 14. Module 23
may perform the associations manually in response to human
input 500 or automatically in response to external
information 502. In this example, a first item 14A and a
second item 14B are respectively associated with vendor
names 34A and 34B. Vendor names 34A and 34B have respective
unique vendor identifiers 58A and 58B. Vendor name 34C owns
both 34A and 34B and has an associated unique identifier
58C. Vendor name 34D owns 34C and has an associated unique
identifier 58D. Vendor name 34E owns 34D and has an
associated unique identifier 58E.
VAT module 23 uses the relationships between 34A-E to
associate identifiers 58A, 58C, 58D and 58E with item 14A
and identifiers 58B, 58C, 58D and 58E with item 14B. For
example, VAT module 23 may use external information 502,
such as a Dun & Bradstreet report, to determine the
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relationships between 34A-E. Human input 500 may also be
used to determine the relationships between 34A-E.
Item 14A is initially associated with vendor name 34A
when received at GPIR 12. VAT module 23 then determines
5 that vendor name 34A is owned by the vendor name 34C, which
is owned by 34D which is owned by 34E. Identifier 58A is
associated with item 14A because vendor name 34A is
associated with item 14A. Identifiers 58C-E may be further
associated with item 14A because vendor name 34A is owned by
10 34C-E. Similarly, identifiers 58B-E may be associated with
item 14B because vendor name 34B is owned by 34C-E.
In the embodiment where each relationship between
vendors is associated with a vendor identifier 58, further
vendor identifiers 58 would be associated with each
15 relationship between 34A-E. For example, item 14A would
have identifier 58A associated with it to identify "Company
A Arizona" as the vendor for item 14A. Item 14A would then
have distinct identifiers 58 associated with it indicating
the relationship between 34A and 34C, 34A and 34D, and 34A
20 and 34E.
It should also be recognized that other changes,
substitutions and alterations are also possible without
departing from the spirit and scope of the present
invention, as defined by the following claims.
