The procure-to-pay process covers activities performed to obtain and manage materials required for manufacturing a product or providing a service. It involves the transactional flow of data with the supplier from the point of order right up to the point of fulfillment of the actual order and payment for the product or service.
Procure-to-Pay (P2P) streamlines the payment process that combines the purchasing and payables departments. It is part of the broader procurement management process and comprises five steps: deciding what to buy, ensuring everything is in order, getting it, checking it over, and paying for it.
Procuring goods and services and making payments typically involve several procedures at most firms. Requests for quotations or authorized product catalogs may be necessary during the procurement.
The entirety of the P2P process is broken down into several smaller processes, each of which takes place in a distinct area of the organization and involves a variety of participants. This can add extra steps and confusion, mainly if the procedure is entirely paper-based and manual.
Automating this process results in cost savings and improved processing efficiency by removing labor-intensive manual procedures prone to error and taking up unnecessary amounts of time. Total financial data capture and superior supply chain visibility are possible with fully automated procurement and payables operations.
Automatic processes allow for more efficient and convenient electronic communication with vendors. Connecting to each supplier, from the largest to the smallest, is made possible when various approaches to interact and trade data and documents are used. Further, automation improves supplier relationships and collaboration, and boosts the proportion of invoices paid on time.
The procure-to-pay (P2P) process is critical for managing procurement and payments efficiently. Implementing procure-to-pay automation delivers major benefits including increased control, cost savings, enhanced efficiency, better supplier relationships, improved visibility, and higher productivity.
Tightly integrating and automating procurement and payment processes enables P2P systems to deliver significant strategic and financial benefits. Enterprises gain the oversight, compliance, savings and efficiency needed to optimize procurement operations.
Continue read to explore GEP’s Procure-To-Pay software solutions.