The amount of detail in spend data differs between companies. What is a critical field to one industry may not matter to another. As our team builds classification rules, we look at any and all fields that contain useful information.
Typical fields we may see in a file from a client:
1 – Supplier Name
2 – Supplier Code
3 – Supplier Location
4 – Line Item Description
5 – Material/Category Description
6 – GL Account Description
7 – Spend Amount
8 – Source System
In our experience, GL account descriptions are usually inaccurate and we rarely build rules based on this field. We can quickly categorize internal transactions based on supplier names.
An example of a simple classification rule is:
Classify transactions where Supplier Name equals “Cargill Inc” and Material Description contains “Malt” to the client’s category “Raw Materials – Malt.” This may alternatively be classified to UNSPSC code 50221302 – Barley Malt.
The level of detail to a classification rule can be an indicator of strength, and stronger rules often make for smarter rules. For example, a rule based on the conditions where Supplier Name equals “Cargill Inc”, Item Description contains “Malt”, Country Code contains “GB”, and Spend Source equals “Invoice” will account for each of these four variables. The specificity of this rule insures that all invoiced Cargill Inc spend on malt that originated from Great Britain is classified correctly under Barley Malt.