In an organization, a procurement process is quite arduous and time-consuming. The process begins with planning, quote requests, selecting vendors, purchase orders, receipts, assessing the goods and services, payment invoice, and reporting. Chief Procurement Officers (CPO) and Chief Financial Officers (CFO) are constantly searching for new ways to minimize costs and increase savings through efficiency.
A traditional paper-based and labor intensive procure-to-pay process brings a vast number of challenges such as lack of visibility in spend management, error-prone, unable to ensure contract compliance, inefficiency, and more.
On the other hand, automating the procure-to-pay (P2P) software facilitates organizations to understand and track their spend, negotiate in case of better pricing, minimize excessive spend, and increase contract compliance.
Reasons for which you will need a procure-to-pay process are:
- Frequent duplicate payments
- The number of suppliers increases regularly
- Payments made without internal approval
- Spend led away from suppliers
Better Spend Visibility for Decision-Making
Automation completely eradicates unnecessary costs such as paperwork in the manual procure-to-pay (P2P) process and increases spend visibility, sourcing velocity, and compliance while minimizing the risk at every step of the procurement lifecycle. It helps suppliers and buyers to receive accurate and real-time data for making informed decisions.
Also, the automated P2P system provides complete visibility between goods, receipts, documents, and invoices, ensuring that the goods or services are appropriately received before payment.
Contracts are regarded as crucial documents of an organization, but usually, catalogs from a few selected suppliers are kept and maintained. Professionals are unable to access information on suppliers past offerings or offerings from the new suppliers because they do not have the required catalogs.
An integrated procure-to-pay software helps to link the system with the contract management system while creating a centralized category for storing contracts. This helps procurement professionals to get the details and costs of previous orders from a past supplier.
Accessible Records from a Centralized Repository
A procure to pay system eliminates the use of paperwork and stores all records digitally in the software, which makes it easier when professionals want to retrieve data on a particular transaction or supplier. They can access the data with great ease instead of going through all the documents and files. Buyers can also access the catalogs online from their suppliers, review purchase orders and approve them.
Also, the cloud-based P2P software provides selective permissions in order to allow several levels of access and generate reminders automatically to alert the users if purchase orders need approval.
Report and Analysis
With automating procure-to-pay software, it is easier to create reports that will provide granular insight into supplier performance, observe spends patterns at multiple levels, compliance issues, and more. Such kinds of reports are extremely valuable to businesses and assist them in controlling excess spends.
To Sum Up
If you want your organization to be competitive, automation of procurement options has now become a necessity, and the organization must be strategic rather than transactional. The primary advantage is to free procurement professionals from performing low-value tasks so they can concentrate on more strategic activities.