When it comes to direct spend, there are so many controls in procurement and accounts payable. The purchase of goods depends on the company, however, to run the day-to-day operations of the business, you have to effectively manage the indirect spend.
Insights on indirect spend are lacking due to decentralization and lack of protocols, rules and standards. An accounts payable solution can enable procurement to effectively manage indirect spend. The following three measures will help you manage indirect spend effectively:
No two businesses have the same procurement policy. So, instead of having a single policy, most solutions have predefined purchasing controls that can be customized to handle business policies. However, the customization results in various requirements, restrictions and workflows. Control can be gained when there is real-time visibility over each transaction and spend activity. In addition, non-purchase order transactions can be managed effectively by automating the procure to pay procedure.
As mentioned earlier, procurement processes are completely different from one organization to another. An accounts payable solution can fit in any process including any specification and approval workflow. Some can be integrated easily with ERP applications. The scalability of an automated solution allows you to consider the complete end-to-end solution or use any specific functions as required.
Improved collaboration can break down silos and barriers that interfere with the transactions from the purchase order to payment. Automation will not only make it possible for procurement and accounts payable to work together but also opens up the communication channels. Since both the departments can gain complete visibility over every transaction, both the departments can optimize the performance. The solution would make the entire process collaborative so that all those involved in the process will get to know about outstanding liabilities, cash flow and exceptions. This would give the finance team a better chance to manage the procure-to-pay processes.