Purchasing job is how to check kickbacks. A good supplier is the key to the success of any enterprise.

For many CEOs, fighting kickbacks comes down to periodically looking for employees who are abusing their position. However, carrying out one-time actions is ineffective: having waited out the storm, bribe-takers begin to catch up. Therefore, practitioners recommend building a system in which the very possibility of getting kickbacks would be excluded. This article talks about methods for identifying violators, as well as indirect signs that allow you to recognize those who take kickbacks.

Practitioners experience

There are three main ways to test suspect employees

Maxim Gorbachev Trainer-Sales Consultant, Moscow; candidate of psychological sciences
Dmitry Tkachenko Sales Trainer, Moscow

Reference

Maxim Gorbachev- lawyer; worked in the "rollback-intensive" industries of distribution of pharmaceuticals and supplies of technical oils.
Dmitry Tkachenko managed sales departments in such a "rollback-intensive" sales area as the supply of workwear industrial enterprises. Co-organize trainings on active sales and the fight against kickbacks, conduct consulting projects for the creation and development of sales departments. Among the clients are Baltika, Gazprom, Donskoy Tabak, Rostelecom, R-Style, Siemens Russia, enterprises of the New Commonwealth holding, Olma-Press publishing house. Authors of the bestseller "Kickback: Special Technique of Client Attraction" (M.: Vershina, 2008).

Of course, you will have to allocate additional funds to combat kickbacks. And it is quite possible that the costs incurred by the enterprise will exceed the possible damage from kickbacks. Therefore, before starting the fight against bribery, calculate the costs of the planned campaign. To approximate the loss from overpriced purchases, compare the total volume of purchases for a certain period with how much, according to spot checks, the average market prices were exceeded. Based on this assessment, as well as your goals, the market situation and the specifics of the procurement procedures in your company, determine the budget for measures to combat kickbacks.

Typically, kickbacks in enterprises are identified in one of the following ways.

1. Checking the compliance of the employee's standard of living with his salary. If, for example, an employee receives 1,000 conventional units per month, but at the same time changes imported cars every six months, it is worth considering where he gets the money from. For example, in one trading company, a buyer incurred due diligence after washing his hands before lunch while standing next to the head of security. Both found that they had the same watch. At the same time, the head of security received a watch from the company as a gift for the anniversary (and it cost $ 1,900), and the buyer was presented with a watch by his student wife for his birthday. As a result, the manager was checked for two whole months. Suppliers regularly informed him that some people were calling, asking questions and trying to purchase goods for cash on his behalf. Of course, such checks slow down the procurement process, but managers are afraid to commit violations. After a while, everyone gets used to the fact that managing large financial resources associated with periodic security checks.

If the company does not have a security service, its functions have to be taken over by the General Director. You should follow not only the growth of the well-being of employees (purchasing a new car, buying expensive clothes and accessories), but also the nuances of their behavior.

2. Test purchases. Such checks of employees are somewhat reminiscent of the “mystery shopper” technology. Let's take an example. The security service of one company came up with a legend about the supplier to check their suppliers. Compiled price lists for products, published a simple website on the Internet. Then the controller, under the guise of an employee of the supplier firm, turned to the purchasing department and offered a rollback. One of the managers, after several conversations, agreed. He was fired with a big scandal. After that, the purchasing staff was informed that management intended to use this method in the future. The events that followed are significant. Within two months, more than half of the suppliers quit their job own will, and the employees who came in their place increased the average markup by 7% only by reducing purchase prices.

But this method is applicable only to a presumptuous bribe taker who has lost all caution and demands a rollback from any supplier. Meanwhile, there are buyers who take kickbacks only from trusted partners. It is difficult to catch such violators using test purchases, since they cooperate with new suppliers without kickbacks and, only when they work together, start talking about bribes.

3. Lie detector testing. This is the best way to check long-term employees. If this method is just starting to be used at the enterprise, we recommend testing all purchasing managers every three to four months. For example, when applying for a job at the Kalina concern, candidates for the position of a supplier are warned that they will periodically undergo a polygraph test. The questions are standard: did you provide benefits to any supplier, did you receive remuneration. The reliability of these checks is very high.

In most cases, an employee found to be kickbacking is fired. Whether to notify subordinates of the reason for the dismissal of their colleague or not is up to you. We, however, believe that it is more useful to notify: this way you will demonstrate to employees how risky it is to give yourself such salary increases. In addition, to prevent rollbacks, you can:

• transfer to the suppliers only the function of collecting information about the proposals of suppliers, and make the final decision independently (or introduce a collegial procedure for making such decisions);
• use data from price monitoring conducted by the marketing department to control information that comes from buyers;
• to reward suppliers for savings on purchases or profitability received from commodity group taking into account entry prices and margins;
• personally negotiate with key suppliers of your company;
• formalize procurement procedures and attract suppliers through tenders.

He speaks CEO

Kirill Kuznetsov General Director of Tenders.ru, Moscow

Reference

"Tenders.ru"
Field of activity: organization and audit of procurement activities of companies, state and municipal authorities.
Form of organization: OOO.
Location: Moscow.
Number of staff: 15.
Main clients: non-departmental security of the Ministry of Finance of Russia, Federal State Institution “Combine “Signal” of the Federal Agency for State Reserves, state corporation “Rosatom”, companies “Alcor Bio”, “Eldorado”.
Length of time as General Manager: since 2006.
Participation of the CEO in business: co-owner (share - 50%).

Symbolic payments for small “services” often turn into large bribes over time (we will call a spade a spade, and not talk about some kind of “kickbacks” or “client rewards”). The company in which the bribe-taker works becomes seriously vulnerable. Compromising evidence is accumulating that can force this employee to commit the most serious violations. Direct damage is also obvious: the company receives not the best products at inflated prices. Therefore, managers who are accustomed to be lenient with bribe-takers are putting their business in serious danger.

I am skeptical about the use of lie detectors and provoking a bribe; Our company does not use these methods. In my opinion more effective method, which also avoids unnecessary publicity, is when the security service analyzes the standard of living of suspected employees and their relatives (after all, often bribes are given not in money and not to the employee himself, but to his proxies). So, for example, we identified one violator - he himself lived relatively modestly, but he spent big money on the maintenance of his mistress. In addition, an audit of their activities helps to identify unscrupulous (or incompetent) employees - it is necessary to correlate the results of the work of suspects with the market average.

However, it is not enough to identify bribe-takers – in principle, it is necessary to minimize the possibility of situations that provoke bribes. To do this, in particular, you need to clearly formulate the rules for choosing counterparties with whom you cooperate. These rules should eliminate the risk that an employee of the company will agree to receive remuneration from outside. In addition, it is necessary to build a system of control, training, encouragement and, of course, punishment of personnel.

Practice experience

How to prevent employees from getting kickbacks

Vladimir Filonov Expert of the Control and Audit Department of the Magnezit Group, Moscow

Reference

"Magnezite"
Field of activity: production and sale of refractory products (full cycle from extraction of raw materials to engineering and maintenance services).
Form of organization: COMPANY; company group.
Territory: head office - in Moscow; representative offices - in Germany, Kazakhstan, China, Poland, Slovakia and Ukraine.

Who in the organization can take kickbacks? Of course, most will answer that they are employees of the purchasing department. However, in reality, employees of other enterprise services also have the opportunity to receive kickbacks (see. table). For example, department information technologies referring to low speed data transmission over the Internet may convince you to contract with another provider that offers similar services, albeit at an inflated price.

Every organization has its own ways of dealing with kickbacks. For example, one of the big Russian manufacturers Coal once issued a desk calendar, in which there was an appeal to all employees with a request to report various kinds of theft by the indicated phones, fax and e-mail. Some companies test a suspected employee with a lie detector. Especially often this method is used in Russian chain stores electronics. If an employee refuses to be tested, management considers this an indirect confirmation of a kickback. It is not easy to fire an employee who refuses to take a lie detector test, but it is quite possible to create unbearable working conditions for him, so that he himself will write a letter of resignation.

Let's look at other ways you can detect and prevent kickbacks.

Request for proposals from multiple suppliers. Supply a large assortment inventory items (inventory and materials), whether it be water for the office or computers, no one famous company should alert the service officer internal audit(in small companies, this function can be performed by one person - the main thing is that he reports to you). It is important to compare the indicated prices with the market prices before paying the supplier's invoice. In my practice, it happened more than once that they brought me an invoice or contract for a large sum to agree on, and, comparing prices with the average market prices, I found a significant overstatement. Then the question arose whether the employee was pursuing personal gain or simply neglected his duties, choosing the first available, albeit expensive, offer. It is not superfluous to explain this question in such cases.

Supplier price list request. Sometimes the supplier explains the high prices in the supplier's invoice by the monopolistic position of this company in the market (for example, by the fact that it is the only dealer in the region). Check it. If you suspect that an employee is receiving a kickback from a certain supplier, have the controller contact this company and, posing as an employee of a non-existent company, ask him offer for purchased products. Please call from mobile phone, since the city number of your company may be reflected in the identifier of the supplier. In order not to arouse suspicion, you need to request prices for a slightly different assortment and quantity of goods than those ordered by your supplier. Choose a few items that have the largest share in the total amount of your account. If a non-existent firm is billed for a product that costs less than the purchasing department's bill, you'll have a serious conversation with the supplier.

Purchasing approval. In one company, the acquisition of goods and materials occurs as follows. An employee of the purchasing department brings an invoice for payment for products from suppliers to the internal audit department. The controller finds out in the accounting program what is the size of the balance of these goods, and also studies the price offers of other potential suppliers. He calls them himself and, if the offers are lower, he asks for an invoice. At the end of the controller financial director The one who decides on payment receives the following papers: an invoice from the purchasing department, a certificate of the volume of inventory balances in the warehouse, price offers from potential suppliers and invoices from them. Based on all this, the CFO makes one of the following decisions:

• approves the invoice submitted by the purchasing department;
• recommends that suppliers request an invoice for a smaller quantity of goods and materials due to the significant balances available in the warehouse;
• refuses to pay the invoice of the purchasing department, explaining his decision by the fact that the invoice submitted by the controller contains a lower amount (see How the bank suffered losses due to the fact that it did not control purchases).

How the bank suffered losses due to the fact that it did not control purchases

Employees of companies that distribute electronic legal databases receive a percentage of sales. One manager responsible for updating the databases had a bank among its clients that already used several similar systems in its work. At each meeting with a bank employee who makes decisions on this issue, the manager talked about the merits of his electronic databases, but persuasion did not work. Realizing that he would not be able to sell the goods, he offered the bank employee his entire percentage of the cost of the systems purchased by the institution. No sooner had the manager returned to the office than a bank employee had already contacted the sales department and ordered several bases for a large amount. Suppliers offered a discount for such a purchase volume. However, the bank worker played a grudge, saying that his institution is very solid and does not need discounts. If the bank had control over purchases and studied market offers, overpricing (at least by the size of the discount) could be identified. In the absence of control, the institution suffered losses in the acquisition of bases, incurs losses in their constant updating; moreover, it is possible that the bank had no need to buy these systems at all. Number of staff: over 25,000.
Main clients: companies from 20 countries, including Gazprom, Lukoil, Russian Railways, Rosneft, Surgutneftegaz, TNK-BP, Transneft, ExxonMobil Corporation, General Electric, Royal Dutch Shell, Samsung.

If the company's activities are clearly regulated, the likelihood of kickbacks by employees is close to zero. Here are some basic rules of such a system. To select a supplier and conclude a contract, you need:

• Competently organized competition, openness of procurement procedures. If there is no way to organize competition, price control methods should be used.
• Collegial and competent consideration of proposals by a group of specialists of different profiles. The group, in addition to buyers, should include representatives of the customer (engineers), specialists providing economic security companies, financiers, lawyers. If necessary, experts may be involved to evaluate proposals and develop recommendations for choosing a supplier.
• Comparison of the objective characteristics of proposals with pre-established criteria. For ease of comparison, sentences must be reduced to a single basis.
• Creation of equal opportunities for all companies. So, any supplier can apply for cooperation with our company, he only needs to go through the online registration procedure and submit certain documents. At the same time, the system is built in such a way that none of our employees can independently exclude a supplier from the list of participants in the procurement procedures. If it turns out that one of the supplier's employees is acting dishonestly, then we can exclude this company from the list of partners. If the supplier encounters obstacles from our buyer, he has the opportunity to address the company's management with this problem, bypassing the manager. The supplier and the buyer can conclude an anti-corruption agreement by agreeing to refrain from any bribery of each other's employees, including by paying money, giving gifts, etc. The agreement provides for the appointment by the supplier and the buyer of authorized persons who will resolve relevant issues between the parties.

Building such a procurement system is not an easy task. It requires the will of the management of the enterprise, significant material and time s x costs. However, the result is worth it: instead of suppressing the symptoms of the disease, you will get a radical recovery of the business as a result.

Kickbacks - when are they a problem and when are they the norm? How do companies prevent such cases and how effective is it?

To whom is the problem, and to whom is the source of income

Kickbacks are a problem for owners and managers commercial organizations. Getting a kickback by a supplier leads to the fact that the purchase of goods or raw materials is not on the most favorable terms for the buying company, which leads to an increase in cost and, ultimately, to a decrease in business profitability.

Kickbacks make life difficult for the management of supplier companies that pay "personal bonuses" to buyers. Some suppliers find themselves in a situation where they have to pay kickbacks to employees at all levels of the client organization (from the supplier to commercial director). Moreover, some of these kickbacks end up in the pockets of their own sellers (after all, it is difficult to verify how much money the seller "denounced" to the buyer). As a result, continuing to cooperate with the “bribe-taking organization” ceases to be economically profitable - all profits are eaten up by kickbacks.

Kickbacks are the norm for state structures and for natural monopolies, where for a number of officials and personnel the question of what else can be used to “cut off” budget money is relevant, despite tenders and systems electronic trading. Vivid examples of this are the recent corruption scandals involving the purchase of subsidized medicines from the MHIF and the purchase of computer equipment from the Pension Fund.

Kickbacks, of course, are not limited to the public sector. The following remarks can be cited as examples of the prevalence of kickbacks in the commercial sphere (in various markets).

Kickbacks in the IT market.“Kickbacks are very common in the field of ‘systems integration’. In some cases, kickbacks are one of the main ways to promote companies in this segment, since the competition here is very tight and the services provided to customers are almost the same and equivalent, and therefore, without “recruiting” a person in the client company of interest, move forward, grow and earn integrator companies is almost impossible. Rollback averages 10% for hardware and 25% for software

Kickbacks in the printing market. The rollback zone narrowed a little. On small orders, the margin has become small, and the “rollback” is not economically feasible. Many companies that place very large orders in printing houses have established strict control over their employees with the help of security services - up to wiretapping of work phones. But in the market of medium orders is still a real expanse.

Some trading companies have allowed their buyers to officially receive commissions from suppliers. As a confirmation of this practice, we will cite the data of a survey of managers of 120 trading companies. To the question “Do your buyers have the opportunity to officially receive bonuses from suppliers?” 7% answered in the affirmative (data from www.zakup.ru). That is, the kickback is transferred to the buyer completely legally - under the guise of a commission under an agency agreement. In this case, some retailers put a condition on the supplier: you will “pay” a certain percentage (which varies from 1% to 3%) to the purchasing department employee who will work with you on each delivery. It’s even easier for the supplier, you don’t need to secretly transfer money, you can make a payment according to accounting. The purchaser's management controls the size of the rollback, does not allow him to "burrow" and pledge his interest in excess of the supplier's price. True, the question arises who manages the buyer in this situation: his management or the supplier. Since the seller will say to the requirement to provide an additional discount: “Why do you need a discount? After all, from the purchase at a discount, in the end, you will receive less. ”

What danger does the practice of kickbacks in the organization represent for the sphere of personnel management of the company? The opportunity to receive or "cut" a rollback leads to the "corruption" of the company's employees. After all, suppliers and sellers often receive in this way as much, and sometimes several times more, than their own salary. As a result, they are controlled by the one who gives kickbacks. In addition, the value of development and training is lost. sales staff, after all, why should there be any trainings on working with clients, if “selling is just a rollback offer”. This leads to the fact that sellers lose their qualifications and, as a result, simply cannot work when the company refuses to use kickback schemes.

Rustle in raspberries.

Usually, if an employee is caught on a rollback, then he is fired after a preventive “rustle” is made in the unit. In a number of cases, the security service or invited "bandits" insistently ask for the return of illegally acquired by overwork.

Some organizations (although there are only a few of them) even initiate criminal cases against stealing employees. The vast majority of cases (out of the meager number yet identified and reached the court) on the fact of “rollback” fall apart in court. The fact is that the main snag in the application of Art. 204 of the Criminal Code of the Russian Federation (“Commercial bribery”) is that, just as in the case of a bribe, the corpus delicti is difficult to prove.

An example from practice.

In one trading company, they decided not to limit themselves to the dismissal of a buyer caught on a rollback. A criminal case was brought against him and the sales manager was held accountable. The case, of course, did not reach the court, but subsequent events became indicative. Within two months, more than half of the buyers resigned of their own free will. New hires increased the average markup by seven percent by lowering the purchase price alone.

Rollback sunset

According to the survey of trading executives mentioned above, everyone fights kickbacks, but not everyone wins this fight.

There are three groups of methods for dealing with kickbacks:

1. Regulatory methods are aimed at creating in the organization a system of formalized internal rules that describe the procurement procedure. This group includes:
1) separation of the functions of searching for suppliers and making a decision to purchase;
2) price monitoring of the market;
3) procurement budgeting;
4) holding tenders.

2. The use of an electronic trading system in the field of procurement excludes the possibility of collusion between the representatives of the buyer and the seller, eliminating the possibility of personal contacts between the participants in the transaction. State structures are now switching to such a procurement scheme via the Internet.

3. Psychological methods allow you to influence the very cause of violations - the desire of personnel for illegal profit. Since some of these methods are most often within the purview of HR, we will consider them in more detail. This group includes:

• checking employees of the risk group on a polygraph ("lie detector") when hiring or during work. As a preventive measure against kickbacks, we recommend conducting screening checks of all candidates for the supply department upon employment, as well as once every six months scheduled inspections. If the practice of polygraph tests is only introduced at the enterprise, then it is recommended to conduct total checks of all buyers with an interval of 3-4 months.
• creation of a code that includes the rules of corporate ethics. The presence itself corporate code the company does not discourage the staff from striving for illegal gain. Corporate ethics counteracts “rollback” only if the organization has a strong corporate culture, which imposes a taboo on "kickbacks" and other manifestations of "gratitude from the outside." In order for the code not to remain a formality, it is necessary to control the implementation of these rules. It is also necessary to get away from double standards, when “we give kickbacks to customers”, but “it is forbidden to take kickbacks from suppliers”. Practice has shown that for small companies the code is not relevant, and in large companies it is necessary to do a lot of work to implement it;
• carrying out provocations-checks of their employees. The method is derived from the Mystery Shopping technology for checking the quality of service. A legend of the supplier company is created (up to a simple website on the Internet), product prices are formed, and under the guise of a representative of the supplier, the controller contacts the purchasing department and offers a rollback. If the purchaser agrees, they are fired, raising a big internal scandal. After that, employees are notified that management intends to use this method of secret verification in the future;
• bonuses to suppliers from savings on purchases. To do this, it is necessary that the marketing department regularly monitor prices on the market, and production (merchandisers) control the quality of the supplied products. Otherwise, the buyer will buy illiquid assets for two kopecks and receive his premium.

If we talk about the effectiveness of these methods, then everything is far from unambiguous. For example, according to existing statistics, the use of an electronic bidding system can reduce purchase prices by an average of 10%. Other examples show that one-off "anti-rebound" actions help only partially. Buyers, having waited out the storm, begin to make up for "lost profits." Requires long term effect systems approach to combat kickbacks. Success in this difficult task can only bring A complex approach to building a procurement and control system, as well as a balanced use of all countermeasures.

Source http://otkatov.net.ru/struggle/methods/6/

“Greetings, reader of the Marketer's Diary. Let's talk about a burning topic in almost any retail business, and not only in retail business. Let's talk about kickbacks in supply. It is no secret that the problems of companies associated with kickbacks appeared a long time ago, and most likely they are unlikely to disappear. Is it necessary to fight it? And most importantly, how to eradicate a rollback in the supply of the company? That is what this article is about.”

In order for companies to survive and develop in modern market conditions they need to constantly increase their profits. It is understandable, but ... How to achieve this? One way is to reduce the cost of purchasing goods. However, this is where the company runs into a wall in the form of a procurement officer who, in general, is not interested in developing the company's business, but is interested in increasing personal wealth. For what? One option is a bribe.

The question arises, what does marketing have to do with kickbacks in the supply department? And the most that neither is direct. The task of marketing is to ensure satisfaction of the requests and needs of the buyer, and not the personal motives of the supplier.

The assortment in the store should be planned based on the preferences of the buyer and at least logic. Stocks of residues should also be adequate to sales and supply opportunities, but not to the desires of suppliers. And lastly, reducing the costs of the enterprise and increasing its profits - isn't this the final goal of marketing?

I don't personally dislike purchasing managers, I even love them. I have very good relations with many, even friendly with some, but as Bodrov said in the film Brother-2: "All power is in truth."

In Russia, bribes and kickbacks in supply departments are, for the most part, the norm. According to statistics, and you can’t help but believe it, more than 70% of suppliers present to managers of the supply department from 1 to 15% of the value of the shipped goods in the form of a personal bonus or kickback.

In addition, suppliers officially pay companies to promote their product on store shelves. And yet, based on statistics, among the suppliers, from 10 to 50% belong to the category of "haulers" and it depends on internal control in the company itself.

Of course, all additional costs, including the kickback to the supplier, are included in the cost of the goods (everyone wants to receive a profit). And as a result, taking into account the margin of the retailer itself, at the exit, the final price for the buyer is 10-20% higher.

Negative aspects of a rollback in retail supply

• The supplier incurs losses and inflates the price, in connection with which sales volumes are reduced.
• Retail incurs additional costs due to price and terms of delivery.
• Buyer - either spends too much or does not spend at all, but at the same time remains without a purchase.
• And even a supplier who has received a double benefit (one in the form of a kickback, the other in the form of a salary) is forced to break the law, harass his nerves and work under pain of being fired if the secret is revealed.

Rollback in supply. How much and for what?

Introduction of a new product to the assortment. In this case, the amount of the bonus to the supplier can reach up to 5% of the delivery amount. For the network, this threatens to overprice and occupy retail space, unverified goods.

Purchase of commercial equipment for equipping retail network. Also in this category can be attributed the purchase of household and stationery to ensure the work of the office. The rollback amount can reach 20% of the delivery amount. For any company, these are inflated costs that may not pay for themselves.

Ordering excess or perishable goods. Not only that, retail (mainly grocery) bears the cost of writing off expired goods, which cannot always be returned to the supplier. It is also the increased costs of storing excess goods in the warehouse and the workload of the warehouse, which can lead to even higher costs for increasing the area of ​​​​the warehouse (for example, purchasing a new one) or the lack of warehousing hot commodity. The amount of rollback of the manager of the supply department can reach 10% of the order value.

Displaying goods in advantageous places. Sometimes the appearance of a product in the best place trading floor is not related to merchandising criteria or profit increase, but to the initiative of the supplier. In this case, the network loses money that could have been received from the supplier for the favorable placement of goods (payment for the gold shelf, quite official marketing article income of any retailer, it’s just that suppliers don’t always know about it and act through suppliers). The rollback in this case can be up to 10-15% of the cost of monthly or quarterly sales of goods. By the way, if you go the official way, it can be much cheaper.

How to identify kickbacks in the supply department?

The task of identifying the receipt of a kickback by the manager of the supply department is very difficult, but quite solvable. This should be done by the security department or the management of the company. The following are the main features of work on the rollback system for suppliers. All of them are indirect, but their combination will allow us to draw the right conclusions.

First, do not distrust rumors. Human envy is a very strong thing and it is indestructible. I'm not saying that every rumor needs to be believed, but it's still worth checking them and conducting closer monitoring.

Secondly, it is worth paying attention to the standard of living of the supplier. It is unlikely that an employee with a salary of 30,000 - 40,000 rubles a month can afford to maintain a prestigious foreign car that is expensive to maintain or an apartment in an elite building in the city center. It is not a fact, of course, that these funds were received through kickbacks, but it is worth paying attention to.

Third, often, kickback negotiations are always conducted outside the walls of the company. It is worth watching the manager of the supply department, who goes to the client for negotiations.

Fourthly, it is necessary to monitor prices, and permanently. If a competitor has a cheaper price, then you need to clearly understand what you are overpaying for. Naturally, there are a lot of objective reasons here, for example, a smaller volume of delivery or additional service (supplier's own delivery), etc., but it is necessary to pay attention to this.

One of the options is to check the managers of the supply department on a polygraph. Naturally, these are additional costs and the consent of the employee is required, but as a result, the costs can be recouped many times over. And it is desirable for the management of the company, when using this method, to set a personal example.

Sixth, indirect signs of the existence of a rollback include the priority of paying bills from the same company. Those. the manager of the supply department has a "favorite" among the suppliers, whose interests are beginning to be lobbied within the company.

How to deal with kickbacks in the supply department?

When, on the basis of indirect signs, it is possible to identify the supplier's interest in a particular company, but there is no clear evidence, measures must be taken. What can be done in this case:

1. Transfer the supplier company to another manager, reduce the volume of purchases (if possible, without reducing sales), delay payments on invoices. A supplier who is paid a kickback has a number of agreements and must earn his money. In this case, they will take certain steps to improve the situation - here everything will become clear.
2. Clearly communicate to all suppliers what the company has formal possibilities for presenting goods at the retail point of sale. It is desirable to carry out this communication not by the manager of the supply department.
3. Renew the contract for the supply of goods with the introduction of a clause on serious fines for the supplier in the event that a rollback is established. And a complete break, any relationship. In the case of "extortion" of a rollback by the supply department, provide data to the company's management, i.e. simply hand over the supplier. The supplier is not interested in losing his customers (in the form of a store) and in the event of a choice between an individual and a permanent distribution channel for his products, the decision will be made without hesitation. The only thing this may not work in the case of family ties between the supplier and the manager of the supply department.
4. Increase bonus part wages supply manager. If the manager has a very strong material motivation to lead fair play, and a strong fear of losing a job for getting a kickback - then I'm more than sure there will be fewer kickbacks. But this requires constant monitoring of the activities of the supplier.
5. Constant monitoring of retail prices. If everything is fair, and prices for the retailer are higher due to certain criteria, then the task of the supply department manager is to identify these criteria and take measures to reduce the purchase price.

In any case, it is not worth going too far in the fight against supply kickbacks. Too much tightening of the screws can lead to a break in relations with a good supplier or the loss of a very good supplier. What can we do about our mentality and we are ready to take it with pleasure and don’t forget to encourage - otherwise you won’t survive in Russia.)

On this optimistic note, perhaps I will end. Write in the comments or email your thoughts on this issue, as well as subscribe to blog updates.

Probably, this article is no longer for professionals in the field of Procurement, but in general about Procurement and issues that are of interest to everyone, but it is not customary to talk about them openly.

I've brought up the subject of kickbacks several times recently in discussions with corporate or homeland security executives. Of course, in the first place is the position: “We don’t have this, and if we find out, we’ll fire you.” And the second position: "The purpose of the security service is to detect and investigate such cases." But, friends, the main and primary question - doesn't it seem strange to you that everyone is talking about the fact of a "rollback", as about working with an already accomplished fact? Why do we engage in detection or investigation when we should PREVENTION? And by the way, I think that instead of writing “Ability to negotiate” in the basic requirements for employees of procurement departments, it would be better to indicate “Ability to build and follow a transparent and understandable process for the procurement of goods or services.”

Mostly, a kickback refers to some form of incentive for an employee of the customer's company by the supplier in order to conclude a profitable contract, continue cooperation or obtain better conditions. Suppliers form such loyalty fees through inflated prices and very rarely from a share of their profits. Of course, the concept of “kickback” does not include cute little gifts and tokens for holidays or special occasions. There are a large number of methods that can be implemented in conjunction with Procurement or under their control in order to prevent or drastically minimize not only the kickbacks themselves, but even the preliminary thoughts of employees that it is generally possible to implement such a scheme without leaving a trace. Remember, as with SOX: the goal is not to punish and work with a fait accompli. The goal is to make it impossible to do this today or tomorrow. Let's face it: Purchases and kickbacks in Russia are like two wings. I hear phrases several times a month that since I am connected with purchases, it means that I live on kickbacks. Of course, it is impossible to change the very attitude towards Procurement in a short period of time.

I want to share a few actionable practices that you can implement and manage to keep your company at a low level of risk from employee and supplier fraud.

Procedures! As strange as it sounds, you need to start with them. It is precisely the clearly described processes of interaction between different departments in the process of procurement of goods or services that will allow you to have a standardized attitude throughout the entire Procurement work chain. Check how clear your company is now in the procedures for conducting tenders, the procedure for paying suppliers, the procedure for closing and prolonging contracts, or, for example, the procedure for paying invoices without a contract. By the way, by personal experience: the more pages in the Procurement procedure, the less efficient it is. The goal is not to get a description of each step - the goal is to get standardization, transparency and openness of common interaction processes. Please note that the procedure does not necessarily have to prohibit and control everything. Conduct a risk assessment and strike a balance between "bureaucratic transparency" for large contracts and a looser, faster process for smaller purchases.

Archival records/documents storage system– “every step” should be recorded. At any stage of work, interested employees should have access to archived data of all processes that led to a particular event in the relationship with the supplier. For a tender, this must be a scorecard or stored confirmation letters from bidders, quotations received from suppliers, or quotation discussion letters. Based on the results of face-to-face meetings or telephone conversations, brief summaries should be written. Such information should be stored in a separate location with systems to monitor its integrity and integrity.

4 eyes rule. Although this method cannot fit in one small paragraph, the principle should be such that at each stage of interaction with the supplier (selection, agreement of conditions, signing of the contract, payment, etc.) there should be control of at least two different departments to minimize likelihood of collusion. For example, Purchasing cannot have its own suppliers, and a business cannot select a new supplier without Purchasing approval. Or payment to the supplier must be agreed not only by the customer's employees, but also verified additionally by finances.

Post payment– suppliers with whom prepayment agreements are concluded should immediately fall into the zone of risk and additional control, both from the Procurement side and from the business side, because increases the likelihood of fraudulent activities on the terms of undelivered goods or services. I'm not sure that this item should be singled out at all, because. any Procurement professional must pay in advance in an exclusivity format. Standard payment terms for suppliers are currently within 15-30 days from the date of signing the act. Large market players can dictate even longer terms. Returning to the point about procedures: nothing prevents you from prescribing in the procedure that in general all suppliers should be transferred to post-payment, and any exception should be agreed at the highest level and constantly monitored?

Purchasing department employees must go on vacation and promote in the company. As strange as it may sound, a person who does not go on vacation may fall under suspicion. An employee who is engaged in daily routine and who does not express a desire to grow may be suspicious. To reduce this risk, it is necessary to adopt a rule that the employees of the Purchasing department are required to take a 2-week vacation once a year without the opportunity remote access to internal systems. Also, at least once a year, discuss with employees their career plans. Because Purchasing in most cases works with many different projects and internal customers, it is quite clear that the development plan will cover both growth within the department and matrix development among internal customers.

Audit for Procurement without prior agreement on the plan and time. The current trend is towards standardization and pre-planning of audits. However, if your company conducts ongoing audits of internal departments, discuss the rule when working with internal customers will also consider the processes of interaction of the department with suppliers, where Purchasing will be part of this process. In this case, the Purchasing department is always under control, both from the side of the general plan and from the side of a cross-functional relationship.

Identification and verification of Suppliers. Verification of suppliers is necessary, both before signing the contract, and in a selective mode. By verification, I do not mean an assessment of the supplier's ability to fulfill contractual relations, but a verification of financial stability, the current state of reporting, owners, beneficiaries and possible restrictions. Currently, there are a large number of solutions on the market that will show the complete picture of your future partner by the TIN number. It is very important that the verification process includes maintaining the integrity of the received information for archival records. This check does not have to be transferred to the Security Service. It is enough that the test is carried out and it is determined responsible person. For high-cost vendors or vendors that provide agency services, you can add a process to conduct selective quarterly change reviews. For contracts where it is planned to use subcontractors, such verification should also apply to them, with the obligatory storage of data with the Customer. From my own experience, I want to add a couple of points that I always pay attention to: the number of employees of the supplier and the bank in which the account is opened. Most likely, I will not be embarrassed if the supplier provided details with an account opened with a Bank that is in the TOP-100. But if the supplier is not regionally specific, and the account is opened in some unknown bank from the second or third hundred, this will be a sign for additional follow-up.

Price offers and negotiations only through electronic systems. I have repeatedly touched on this topic in previous notes, focusing on the fact that the introduction electronic systems negotiations (auctions or trading platforms) — important step not only to get the best price but also to prevent collusion.

The tender must have the possibility of equal participation. Suppliers need to prescribe the exact procedure and procedures before tendering. Very often the tendering process is described in detail in the internal procedures of companies for employees, but very poorly described in the part that is outside the company. Suppliers must understand not only the time frame, but also the basic terms of the tender, as well as the selection criteria. Suppliers must be sure that all information that comes to them is equivalent for all bidders. In large tenders, suppliers who did not win should be given general information about the reasons for this decision. The results of work in this direction will be increased confidence in the absence of possible manipulations by internal customers and purchasing departments at the supplier selection stage.

Any agreement must have a detailed description of the nature of the purchase.. A simple rule: the more detailed the description of the purchase, the more difficult it is to hide. The supplier agreement should have a detailed specification and cost breakdown for each part of the project. The application of this rule will also make it possible to compare basic services different suppliers. For example, logistics, support, IT part, etc.

Monthly cost analysis and tender plan. If you look at the company's standard operating model, sales plans are usually discussed on an almost daily basis in minute detail, and expenses usually come in "large strokes" format. A more detailed analysis of expenses in terms of the number of suppliers, the number of invoices paid, the analytics of the specific ratio of the number of suppliers, which account for more than 70% of all expenses, will provide you with a clear understanding of what is happening. It must be taken into account that as with sales. This method works effectively in conditions of constant reporting, because any potential risk area is immediately apparent. In accordance with this analysis, it is necessary to agree and approve a plan for conducting tenders and revising the terms of work with suppliers for future periods. Otherwise, I often came across a situation where a company annually makes excellent and successful tenders for office supplies and the purchase of paper, but, figuratively speaking, does not notice a security service provider whose costs differ tenfold.

Hear feedback from the supplier. Last year, I spoke with one of the co-owners on the topic of preventing possible kickbacks. big company in Russia. In addition to implementing some of the methods that are described in this note, I suggested that all documents (acts, invoices, contracts) that are transferred to suppliers be additionally stamped with the inscription: “Dear partner, if you know of any case of fraud or excess of authority, which may affect the interaction of our companies, please report. Anonymously…". Also include a special phone number or address Email. If you are sure that all your suppliers are major market players, then, most likely, fraud cannot be ubiquitous inside big company. It's one thing when salespeople discuss possible fraud. And it’s a completely different matter when it’s all processed by employees who do not agree with this approach. Closing documents pass through a large number of ordinary employees, and the presence of such a system encourages to avoid even a hint of kickbacks. While writing this note, I called the company I am writing about and asked about the results. They were very successful: a year later, one report was received, as a result of which an investigation was carried out and administrative actions were taken, both on the part of the customer and the supplier. To some extent, this investigation even contributed to an increase in the level of partnership with the supplier and the transfer of additional volume of the order. Three comments and requests on the order of work were also received. I'm not sure it's necessary to take such drastic measures in all cases, but plan and hold annual meetings with major suppliers at the level of company management - this is a necessary minimum.

In my opinion, the described methods can effectively prevent the risk of fraud in the company's procurement. After re-reading the list, I realized that their correct implementation does not require any huge investments, which usually occur in the investigation of already accomplished facts. If Purchasing helps to save and optimize, then leaders should help Purchasing feel safe when the topic of kickbacks comes up.

P.S. I thought for a long time in which part of the article to insert another control method, but in the end I came to the conclusion that this is no longer even a method, but a statement, the violation of which can also be regarded as a signal. I'm talking about publicity. To what extent are your employees active participants in professional conferences, forums, speeches? After all, Procurement professionals are at the forefront of the company every day in their relationships with third parties. At the same time, there is a high risk of temptation to violate the procedure. Authority and reputation should be in the first place for everyone who is ready to deceive. Discuss this topic with employees more often.

We will live, we will choose the best suppliers. 🙂