If you run any business – from traditional to digital to a blend of each – it is essential to understand the procure-to-pay process and the automated systems that can help harness it.
From the time a product or service is ordered until an invoice is paid, your procurement and accounts payable teams should be able to check the status of a transaction at any point.
In this article, we’re going to talk a lot about that procure-to-pay continuum – what it means- and the process and benefits of using digital software to help.
Photo by Jacques Dillies on Unsplash
What is Procure-to-Pay (P2P)?
During the P2P process, a party places an order, and once the order is delivered, they will make the payment based on the supplier’s invoice.
Procure to pay is basically an automated tool that connects procurement and accounts payable to expedite the process, maintain accuracy, and save money and time.
Benefits of Using P2P for All Businesses
Automating the procure-to-pay process can significantly improve the procurement process in different ways. We’ve mentioned six of those benefits here, but many more could be on the list.
Simplifying Procurement
Procurement systems integrate the business, allowing requisitions to be submitted and authorized more quickly, relevant vendors to be picked based on data, and POs to be prepared and sent to suppliers… Everything is done electronically and is easily traceable.
Saving Money on Invoice Processing
Going paperless saves time and money and allows businesses to deploy personnel for more strategic objectives rather than routine work that can be automated.
Maximizing visibility & Handling Exceptions
A P2P system increases visibility across the supply chain, allowing buyers and suppliers to check invoice progress in real-time. With most bills processed automatically, exceptions can receive the time they need and be handled more quickly.
Supplier Relationship Management
Suppliers may use the portal to determine when they will be paid, providing them with the data they need to make better decisions. Rapid settlement of invoice exceptions and complaints fosters goodwill and gives buyers more visibility.
Improving Negotiation Results
When suppliers are confident in payment details, they could be prepared to give more generous terms to buyers while still guaranteeing that suppliers have the profits they require to build their operation.
Informed Decision Making
Robust P2P systems provide reliable on-demand reporting and analysis. Companies may get more control over their cash flow by leveraging real-time and historical data.
Bottom Line
Your company should invest in procure-to-pay technologies, data management, historical pattern research, and supplier base analytics. Manual procedures and silos poorly affect payment systems and procurement operations, which can substantially impact the bottom line.
From e-sourcing to e-procurement and procure-to-pay (P2P) solutions, Penny offers comprehensive tools that can transform your company’s supply chain process from start to finish. Please contact us to learn more about our affordable, cutting-edge solutions.
