In simple terms, it refers to combining the Purchase and Account Pay departments. The cycle seems to be very simple, but in reality, it involves a lot of steps to complete the payment for procurement. Automation can make the process simpler. Procure-to-pay means a data-driven, fact-based approach to proven business results. Data management plays a key role in Procure-to-Pay today.
Through a smart procurement solution, one can perform spend analysis, and research is completed on time. It is beneficial for the time, risk, and success of the project to gather all the facts before moving to the next step.
Due to a lack of P2P automation, companies are more prone to human error, payment delays, and lost customers. To serve the customer you need an efficient supply chain management system, which is ready to help you get the work done, but it involves several steps, procedures, and collaboration with departments.
How can automation increase Procure-to-Pay efficiency?
Purchase Requisitions: Automated purchase requests can help identify the correct person, save time, and facilitate approval requests.
Purchase order: There is no need for manual or paperwork work, like typing and mailing the physical purchase orders to suppliers or vendors.
Receipt of Goods / Service: An invoice will be automatically sent to the accounts payable department after the supplier ships the merchandise or completes the service. As soon as the shipment is received, the procurement team will enter all the shipment details into the procurement system.
Invoicing: A supplier or a vendor sends an invoice once the goods have been delivered. The purchase order, the invoice, and the order receipt will be cross-checked for its accuracy.
Payment: The P2P Automation integrates with an ERP system, so payments to vendors are automatically completed once invoices are approved.
Major drawbacks with the P2P automation system:
Frequent duplicate payment
Inaccurate Stock analysis
Delay in payment to vendor
Payment made without approval
Key Benefits of Procure-to-pay Automation
The procurement-to-pay automation technology can simplify the day-to-day work process. Automating the procurement-to-pay process eliminates the need for paperwork and manual work, saving a lot of time and money.
Streamline procurement process: One of the most important aspects of the program is that it integrates across all departments, allowing requisitions to be authorized faster and POs to be transmitted electronically in less time, eliminating the need for manual paperwork.
Proactive reporting structure: The availability of accurate data will become extremely efficient. With the real-time and historical data provided, companies can gain greater control over income and business assets.
Enhanced spend visibility: Yes, this is probably the most critical question that management asks the purchase department: what we have spent and what we would like to. Furthermore, a managed P2P solution can provide end-to-end visibility across Purchase orders, sales receipts, invoices, and other documents to ensure that the goods are as specified before they are paid.
Improved customer and supplier relationship: By automating P2P process, all stakeholders in the procurement function will have access to live information, or they can request status on each transaction time-to-time with real-time interactive dashboards.
Improved invoice processing and payment: An automated system can highlight the gaps in invoices and POs, reducing the possibility of payment errors or delays.
Do you have concerns about your procurement setup, order processing, or payments delays? Talk to one of our procurement specialists today.
