The Procure-to-Pay (P2P) process has gained a lot of importance over the past few years. CPOs, as well as CFOs, are continuously searching for new ways to minimize expenses and enhance savings via efficiency.
Traditional paper-based P2P methods bring lots of challenges such as lack of visibility into spend management, lack of compliance with the contract, and general ineffectiveness.
On the other hand, automation aids companies in understanding their spending habits better while minimizing maverick spending and negotiating better pricing for the future.
Three Hidden Advantages of Leveraging P2P Software
- Easy to Access Records
An automated procure-to-pay system helps to store vendor data conveniently in a centralized repository, making them easier to access at the time of sourcing. Within the system, purchasers have access to online catalogs from new or existing vendors, review and approve PO’s, as well as check the status of shipments electronically.
Moreover, a cloud-based P2P solution provides access, permissions, and encryption features to enable multiple levels of scope to approval-based team structures. Businesses can allocate specific authorities to a user for raising PO’s, define spending limits, and so much more.
The solution creates automatic reminders to notify managers when requisitions are pending and need approval, or in the case of a breach for purchasing policies.
2. Catalog Management
Businesses can store multiple contract records. But only some of those catalogs come from vendors. Companies prefer sourcing an item from the original vendor if that relationship still exists. The procurement officer searches through the catalog of vendors to find the details on the item needed. Sometimes, even though the contract from the previous order is available from the vendor, the catalog may not be available.
In some cases, it becomes tough to find an old contract from a stack of other contracts from multiple vendors. In this case, an online P2P software helps the procurement leader to link the solution with a contract management software and create a centralized repository to store all contracts in the absence of a catalog from a vendor.
Also, the solution enables you to save the contract when catalogs are unavailable. It aids companies in efficiently collecting information and historical costs of a previously ordered item from a vendor, even if the catalog remains unavailable.
3. Complete Visibility for Better Business Decisions
P2P software aids you in eliminating unnecessary expenses with manual procurement methods and improves overall visibility, sourcing, and compliance while minimizing the risk of errors at each stage of the procurement lifecycle.
Automation aids both vendors and purchasers to acquire real-time, accurate data to make prompt business decisions. Also, it enhances the processing effectiveness by eliminating all paper components from the equation.
The solution provides full end-to-end visibility into invoices, receipt documentation, and purchase orders to verify the goods have been received before completing the payment. As a result, it protects you from making cash flow decisions based on incomplete data.
P2P automation shortens the entire approval cycle time and minimizes the possibility of missing payment deadlines. It also prevents late payment penalties, enhances vendor relationships, and opens up the chance for vendor discounts.