Bold stratagems that turn big risks into even bigger payoffs are the stuff of legend in the annals of business history. But for the modern business looking to achieve greater profitability, higher productivity, and a competitive edge in their industries, it’s consistent and incremental improvement that promises true value. One area especially rich with potential for value development is the procurement process—particularly the procure to pay (P2P) process (also known as the purchase-to-pay process).
Touching as it does on every cent of a company’s spend, the procure to pay process presents a broad variety of opportunities for cost reduction, process improvement, and positive supply chain/supplier relationship management changes. To obtain the best possible return on investment and shift the focus of procurement away from mere cost reductions and toward building value, companies around the globe are adopting cloud-based Procure-to-Pay software as a core component of their procurement strategy.
What is Procure to Pay Software?
As procurement management has evolved from a service meant to trim costs into a major strategic source of value, it’s become increasingly important for procurement professionals to leverage technology and tools that can enhance productivity, efficiency, and profitability in the most cost-effective ways possible. (There’s still plenty of room to seize competitive advantage, however; a 2018 survey by Paystream Advisors found that just 56% of responding companies use a centralized procurement package.)
Manual processes and outdated software solutions are decentralized and create costly performance issues, including:
- Lost work hours spent chasing exceptions, tracking maverick spend, and dealing with approval bottlenecks.
- Material, storage, and environmental costs associated with mountains of paper.
- Missed discounts for early payment and expensive fees for late payment.
- Damaged supplier relationships through slow payment, processing errors, and missed opportunities for mutually beneficial initiatives.
- Process inefficiencies that reduce overall productivity and damage both competitive advantage and the company’s bottom line.
Procure to pay software solutions were developed to address these deficiencies and provide a flexible, powerful, and collaborative toolset for managing not just the P2P process, but the entirety of the procurement function.
For example, PurchaseControl software is cloud-based, data-driven, and mobile-friendly. It uses procure to pay automation and artificial intelligence to streamline and optimize every step in the P2P process. Procure-to-Pay Software Benefits include:
- Vendor Management, which includes researching, selecting, engaging with, and evaluating the performance of suppliers who make up your supply chain.
- Purchase Requisition Workflows, or the formal process of creating and submitting a purchase requisition (PR) for approval to meet a specific business need.
- Purchase Order (PO) Workflows, covering the creation of a formal, detailed PO from the purchase requisition, including information on the quantity and quality of goods and services, as well as specific terms and conditions.
- Receiving, which includes the acceptance of physical goods (or review of quality and completion for services) and entering the accepted order into inventory, tracking, and accounting systems.
- Invoice Management, during which the invoice is compared to the original PO to verify pricing, quality, quantity, and terms have been met.
- Accounts Payable Workflows, wherein the accounts payable department processes the invoice for payment, submits the payment to the vendor, and reconciles any related financial entries in the accounting system.
“Procurement software like PurchaseControl makes it possible to integrate (or replace) older enterprise resource management systems (ERP systems) and accounting solutions in order to slash waste and improve savings through automation and continuous process improvement.”
Key Benefits of Using Procure to Pay Software
Procurement software like PurchaseControl makes it possible to integrate (or replace) older enterprise resource management systems (ERP systems) and accounting solutions in order to slash waste and improve savings through automation and continuous process improvement.
Integrating a procurement solution brings measurable and immediate benefits across the P2P process, including:
Greater Efficiency Through Automation
For procurement teams, much of the risk exposure generated within by manual processes comes from bottlenecks, human errors, and overall inefficiencies in process and approval workflows.
PurchaseControl’s user-friendly P2P solution banishes bottlenecks and shatters the chains of inefficiency by giving you the power to automate workflows at every stage of the P2P process.
Automation can reduce the time required to complete the PO cycle by half, according to the American Productivity and Quality Center (APQC)’s Open Standards Benchmarking. Companies without automation process an average of 615.7 purchase orders per full-time employee (FTE), as opposed to 1,302.1 purchase orders processed by those who use automation.
Lower cycle times means more savings for your company. How much more? The APQC reports that, for “top performers” using automated procurement, the procurement function accounts for just .12 percent of total revenue. By comparison, “bottom performers” using manual solutions pay five times that rate.
Further Procure-to-Pay software benefits can be seen in the IT department. Cloud-based Software-as-a-Service (SaaS) eProcurement software reduces local IT resource demand, and keeps everyone connected across platforms and devices. Tools like automated reminders and contingency workflows ensure approval workflows work smoothly—and quickly—while built-in 3-way verification makes invoice approval and payment faster, too.
Process Improvements and the End of Maverick Spend
Effective spend management requires total visibility. Total visibility requires effective processes that provide gatekeeping for purchases and ensure optimal pricing, terms, and conditions for all goods and services a company buys.
PurchaseControl makes these process improvements intuitive and easy. All transactional data is collected and stored in a single, secure location, and available for account-dependent review and analysis through dashboard or app.
Automation streamlines and secures all purchases, requiring approval before any order can actually be sent to a vendor. Cloud-based, centralized data management means every purchase order contains the approved terms, conditions, and pricing for a given vendor, and verifies all documents, from the purchase requisition through the final invoice, against one another to prevent fraud and reduce errors and exceptions.
Improved Supplier Relationships
The business processes connected to supplier management and strategic sourcing can also benefit from the use of software solutions like PurchaseControl. At its most effective, supply chain management is about building strategic relationships as much as it is contract management and cost reductions, and PurchaseControl brings additional value to the process through:
- Streamlined procure to pay workflows for early payments and more strategic buys based on actual demand and more accurate forecasting.
- AP automation with full support for manual invoicing and eInvoicing by vendors.
- Providing a single, centralized hub of communication and data management for more effective collaboration with suppliers, reducing miscommunication and fostering a positive sense of shared endeavor.
- Easy and intuitive contract creation, revision, and negotiation thanks to pre-approved content from the legal team available for insertion from the central server. In addition, data-driven insights provide leverage for negotiation of better terms, pricing, and partnerships for projects or initiatives.
- Automated onboarding of new vendors and auto-population of vendor information across your procurement, finance, marketing, and communication platforms.
- Automated tracking of essential key performance indicators (KPIs) for vendors, making it easier to identify your best vendors and streamline your supply chain while preserving contingencies for mission-critical goods and services.
- Dashboard-based access for vendors to offer real-time feedback over the course of the purchase-to-pay process and offer potential suggestions for additional process improvements or shared opportunities for growth.
Improved Business Intelligence
As a transaction travels through the purchasing process, it generates scads of valuable data. And while this information powers tools like 3-way matching to smooth the p2p process as a whole, its utility isn’t limited to the PO cycle. Being able to identify key procurement factors like periods of peak demand, potential production snags, or your most reliable vendors provides better context and detail for more effective planning and decision making.
PurchaseControl collects, organizes, and serves up your data on demand, backing it up in the cloud and making it available whether you’re in the office or two continents away on your phone or tablet.
Having real-time access to and total visibility of all your transactional data makes it much easier to create accurate and complete financial forecasts, production and sales projections, and audit trails, too.
Take Control of Your Procure to Pay Process
Choosing the procurement system that’s right for your business means understanding your company’s unique needs, and the ways in which a cloud-based p2p solution like PurchaseControl can help you meet them. Harness the power of automation and continuous improvement for your procure to pay process, and realize the Procure-to-Pay software benefits that give your business the competitive edge and improved profitability it deserves.
Streamline Your Procure-To-Pay Process for a Better ROI with PurchaseControlFind Out How