July 11, 2023 | Procure to Pay
In today’s fast-paced business environment, organizations are constantly seeking ways to streamline their operations and drive cost savings. One area that holds immense potential for improvement is the procure-to-pay (P2P) process. By implementing P2P automation solutions, businesses can unlock numerous benefits that go beyond just operational efficiency and cost savings. In this blog, we will explore the key advantages of procure-to-pay automation.
P2P automation eliminates manual, high-frequency and time-consuming tasks associated with traditional paper-based processes. It replaces manual purchase requisitions and POs with electronic forms, allowing procurement professionals to seamlessly create, submit and track requests. Automating workflows routes requests for approval to the right stakeholders and boosting the overall efficiency of procurement processes.
Furthermore, by automating invoice processing, businesses can automatically match invoices with receipts and POs, significantly reducing the time and effort needed for manual reconciliation. Additionally, P2P automation enables automated payment processing where payments can be made electronically, ensuring faster and more secure transactions. These streamlined processes result in reduced cycle times, improved productivity and enhanced operational efficiency.
P2P automation helps businesses drive savings in many ways. First, businesses can save on administrative costs, such as paper, printing, storage, and labor expenses by eliminating manual processes and reducing paperwork.
Second, automation positions businesses to better negotiate terms with suppliers, streamline payment schedules and more.
Third, automation positions businesses for better supplier negotiations, take advantage of early and optimize payment schedules. By automating the matching of invoices with POs and receipts, businesses can spot and resolve discrepancies as they arise. This helps mitigate late payment charges or duplicate payments.
Furthermore, radio-frequency identification (RFID ) is one element of P2P automation. This technology can automate the receipt and inspection process, thereby reducing errors and improving efficiency. RFID can enable real-time updates on inventory levels which in turn can enable enterprises to improve inventory management by preventing stockouts or overstock situations.
Automating P2P helps mitigate non-compliance by implementing standardized workflows and rule-based validations. It helps in automatically routing POs and invoices for approval to the right people. This is done by following specified criteria, like budget caps and compliance needs. P2P automation can automatically detect non-compliant transactions for review or reject them altogether. Furthermore, it also helps in documentation and audit trails.
P2P automation provides real-time visibility into the entire procure-to-pay process. Managers and stakeholders can access detailed information about pending approvals, invoice status, budget utilization, and supplier performance. This visibility allows for informed decision-making, proactive management of cash flow, and improved supplier relationship management. With centralized data and reporting capabilities, organizations can gain insights into spending patterns, identify cost-saving opportunities, and optimize procurement strategies.
Furthermore, P2P automation enables businesses to implement robust approval workflows, ensuring proper controls and governance across the entire P2P cycle. By defining approval hierarchies, spending limits, and exception-handling rules, organizations can enforce compliance, prevent maverick spending, and reduce the risk of errors and fraud. This enhanced control promotes financial discipline and strengthens overall financial management.
Delayed or missed payments are responsible for straining supplier and vendor relationships, especially when they become a recurring issue. P2P automation can help here as well. Businesses can stay on top of delivering POs and invoices and have regular communications which can help foster trust and reliability.
For example, when a team member misses sharing a document, a P2P system can immediately notify the supplier about its delay and that it will be transmitted within a few hours. It can also send a copy of the default document that can be edited later. This level of real-time responsiveness helps ensure enhanced collaboration and communication with suppliers.
Procure-to-pay automation brings value to an organization’s procurement processes in multiple ways. From boosting efficiency and cutting cost savings to better accuracy and compliance, P2P automation optimizes processes, enhances end-to-end visibility, and provides data-driven insights for proactive decision-making.
Here is how GEP can help your organization optimize its P2P process.