„The commercial guys don’t understand it anyway. Hence we don’t even need to discuss…“
I was really shocked when I heard this statement from the engineer next to me. For one thing because we tried to negotiate a deal together with our future JV partner and his remark was everything but helpful. For the other one because it became clear how much potential was lost due to this attitude. By the way; I was the guy representing the IT department, hence I wasn’t personally offended.
Generally speaking I’m not a big fan of dual leadership. However, in the construction and real estate industry the collaboration of engineers and finance managers as equal partners is key for success.
Nach meiner Erfahrung haben sich folgende Grundsätze zumindest im Segment Wohnbau bewährt:
The procurement department should be (semi-)centralized and report to the finance manager.
Engineers define their needs without using supplier names and draw up the tender papers from a technical perspective. The procurement department collects the offers.
In den Einkaufsverhandlungen sind Kaufleute und Techniker anwesend, wobei der Lead beim Einkäufer/Kaufmann liegt. Der Techniker beantwortet technische Rückfragen. Der Kaufmann stellt sicher, dass wichtige Nebenbedingungen wie Zahlungskonditionen oder die Geltung eigener AGBs nicht für einen scheinbar guten Preis geopfert werden.
All tenders shall be prepared based on a project plan which shall be discussed in weekly meetings. Engineers place their demand; procurement places the order towards suppliers.
Equipment is also organized via procurement or even a specialized equipment department. Once bought the equipment is internally rented to the construction site.
2. Invoice verification
Speaking about the incoming invoice process two methods have proved to work well.
- All invoices are agreed before issuance between supplier and foreman/construction manager.
- The invoice is sent to the commercial department where it is checked based on formal criteria. A second content check is only conducted randomly in sample cases.
- Option 2:
- Invoices are sent to the (semi-)centralized commercial department where they are checked based on formal criteria. If formally correct invoices are posted to the project cost center.
- In the next step the invoices are checked functionally by the engineers on the construction site. Once again a second content check is only conducted randomly in sample cases. In case of deductions a correction booking is made.
Beiden Varianten ist gemein, dass eingegangene Rechnungen nicht unberücksichtigt liegengelassen werden können. Die in der Praxis manchmal beobachtete Variante, dass Rechnungen zuerst auf die Baustelle zur sachlich fachlichen Prüfung gesendet, dort bearbeitet und danach an die Zweigstelle/Zentrale gesendet werden halte ich jedenfalls für suboptimal.
To avoid negative surprises an operative controlling is key.
In my experience it makes sense to discuss the most important ratios on a weekly basis. In the course of this meeting the work plan for the upcoming week shall be discussed in detail. The previous plan shall be checked against actuals.
Finance managers take part in invoice verification talks with suppliers from time to time on a random basis.
Most readers have sensed that a lot of topics (eg controlling system, application support) need a more detailed discussion. I’ll come back to these in the near future.
Let me finish with one easy way to optimize collaboration between engineers and finance managers. Great teams are formed by common goals. Align bonus structures of engineers and finance managers in the most extensive way.