6 Reasons to Implement a Procure to Pay Solution in your Business
- Posted by: David Watters
- Category: Best Practices
To understand why a modern, future proof Procure to pay (P2P) solution is essential for businesses today, you need to have a good understanding of what it is. In this article, we outline some of the 6 reasons why you should consider implementing a Procure to Pay solution. First things first, let’s talk about what Procure to Pay is in detail along with the benefits that Procure to Pay solutions hold.
What is Procure to Pay?
The P2P process covers how businesses buy and pay for goods and services. It covers the process of deciding that your business needs a good/service, getting internal approval to spend that money, placing the order with a company, receiving the goods or services and then paying for it once you get the invoice. It’s an essential and unavoidable part of any business – and given how essential it is, it’s typically not an area that gets a lot of focus for improvement and is full of inefficiencies. In most organisations the P2P process is full of manual data entry, duplication of effort and little automation leading to poor data accuracy and control and visibility over your corporate spend.
Reasons to implement a modern Procure-to-Pay solution
Automating your procure-to-pay (P2P) processes provides a wide range of benefits for procurement and accounts payable. Below, we cover the improvements you can expect to see in your company if your P2P process is automated: For more detailed information, see our benchmarking guide on discovering how others have succeeded with P2P automation.
Streamlining the procurement process for your business
Procurement solutions drive efficiencies in how purchase requisitions are created and sent around the organisation. Requests are created digitally and sent for approval to pre-determined, appropriate managers,. Supplier data is pulled in from your ERP when selecting suppliers, and purchase orders (POs) can be quickly produced in order to send them electronically to a supplier. This system provides quick access that makes tracking simple.
Reducing the invoice processing time
Modern P2P solutions provide a number of ways to drastically reduce invoice processing times, from automating the data entry of invoices, removing paper from the whole process and matching invoices to purchase orders – they are excellent ways to to reduce time and costs spent on low value, high volume activities. This can free up your team to focus more on strategic, value adding activities.
A P2P solution gives complete visibility to the whole P2P process, from detailed spend reporting and analytics, to spend liability reporting to giving your team and your suppliers the ability to view invoice statuses in real-time. This visibility enables businesses to make data-driven decisions across the supply chain with ease.
Improved Supplier Relationships
Supplier relationships are easily tarnished by late payments and lost invoices, utilising the range of features in a P2P solution, like a supplier portal, suppliers can get full visibility around when they will receive their payment and the status of their invoice. This provides much greater confidence for suppliers through a reliable and easy to use self-service solution.
Leveraging the negotiating power
Spend visibility enables businesses to make better informed, more leveraged buying decisions with their suppliers. Procure to Pay solutions provide full visibility across all corporate spend providing the business with opportunities to consolidate their suppliers, negotiate better deals based on total spend and reduce maverick off-contract spend.
Better Decision making
Real-time and historical data provided by a robust P2P solution allows companies to gain greater control over their cash flow. With complete spend visibility, businesses are able to greatly improve their working capital management, allowing businesses to run more efficiently without the risk of volatility in spending or revenue generation.
These are the 6 reasons why businesses should implement a Procure to pay solution. These solutions will make your business more automated and efficient. So, if you are considering investing in a Procure-to-pay system but are unsure of the benefits, hopefully this article will help clear some of the fog around procure to pay solutions. Want to speak to an expert about this? Book a free consultation with one of our experts at Valtatech today!