Your business will be stuck with manual processes, siloed data and a futile effort to reduce waste. Automation’s ability to reduce costs is unmatched by any other cost-cutting method. Automating the procure-topay process is one of easiest ways to reap these benefits.
What is a procure-topay process?
The procure-topay process of your organization outlines the way you request, acquire and pay for resources and services that are needed to run your business. It covers the way your company approves purchases and chooses vendors. It also includes how it conducts quality assurance (QA) and pays invoices.
Software that automates the procurement process makes it easy to track vendors, conduct purchases, and manage cash flow. These systems automate a number of processes and workflows within your procurement process.
You can reduce waste and costs by automating manual processes. Manual data entry will also be reduced dramatically.
If you do it right, your procurement process will become a strategic asset to your organization.
What are the steps of procure-to-pay?
- Define needs:Identify goods and services that your organization requires and how they will fit in with your business strategy.
- Request & Approval Create purchase requisition documents to identify the approval process. After evaluating budget and requirements, internal decision makers will approve or deny a requisition.
- Vendor selection:Send an RFP (Request for Proposal) detailing the project requirements, available funding and more. Select preferred vendors after researching vendors and evaluating bids.
- Purchase order:Fill in vendor specific requirements, the amount of the order, and any delivery information before sending to vendor.
- Receive, expedite & log: Track timeliness, deliveries and delays in the inventory and procurement systems.
- Invoice reconciliation: Compare invoices with original purchase orders to ensure delivery of requested materials and correct charges.
- Payment:Approve and pay the vendor. Then, enter the payment in the accounting system of the organization.
What is possible with Procure to Pay Automation?
The software reduces costs and increases efficiency by automating many steps. Many of the processes in your procurement system are automated and can be moved from one stage to another without human intervention.
Each procurement automation system differs. It is important to choose a system that supports your business.
Most procure to Pay systems automate these functions.
- Request For Proposals (RFPs):Staff may submit requests to managers for approval.
- Approvals : You can set up guidelines so that approvals are granted if the request meets the parameters. Exceptions may be flagged and manually approved.
- Vendor management: Manage vendors by communicating with them via an online portal. You can rank them based on their services or preferences, and sort them quickly based on availability.
- Reconciliation Collect invoices and QA deliverables. Issue payment.
- Reporting Data can be displayed clearly in dashboards.
If not, you can easily build one using low code. If not, can be built easily using low-code.
Why should you automate your Procure to Pay process?
Automation for automation’s sake is a waste. You need to be cautious, especially with the buzz around digitization. Automating your procure to pay process is a good idea. Here are five.
1. Reduced costs
Automating the procurement-to-pay process can produce real savings. Printing invoices saves you paper and ink. invoice automaton allows you to reduce labor costs, duplicate payment, and late fees.
2. Risk Reduction
Poke Yoke is a part of automation. Transferring data manually between spreadsheets and systems can lead to catastrophic mistakes. With a procure-topay system you can easily move data from one system to another. This information is also much more secure in a spreadsheet.
3. Budgeting Made Easy
The procurement automation creates guidelines that your team must adhere to when making purchases. The approval guardrails reduce tail spending by preventing maverick purchases. The data they provide also empowers purchasing managers to improve budgeting in departments.
Digital procure-topay solutions also provide real-time insight into current expenditure. You’ll be less likely to go over budget. You won’t need to worry about running into debt or having to borrow money to cover expenses.
4. Faster Invoicing
Due to the fact that procure-topay systems are digital, invoices can be sent through your platform easily. Purchase managers can verify goods and services quickly. They can also quickly send payments to accounting and records.
In some cases, your organization might even be eligible for early payment discounts.
5. Better Vendor Relationships
Vendors like getting paid quicker. Automating procure-topay will not only improve your vendor relationship, but it’s also a great way to save time. Vendor portals that allow self-service enable vendors to maintain their vital information. This platform also allows for a clear and centralized communication. It also gives you more insight, so that you can grow your relationships with vendors.
6. Improved Order Speed
To ensure that the supply chain volatility doesn’t negatively impact on customers, businesses need to be fast. Automated procurement-to-pay software can save time and resources, which would otherwise be needed to calculate and act on the constant and rapid changes within the supply chain.
What to avoid with Procure-to-Pay Automation
The benefits of automating the procure-topay process are obvious, but there are also some risks and downsides. Investing in a solution for procure-topay that does not meet your business’s needs is the biggest risk. Onboarding, testing and deploying new systems are expensive, so you will need to use the system for 5 – 7 year.
You need to research different procure-topay solutions. Vendors can provide you with the cost of the entire platform. Check if you can find features that meet your needs.
Low code can be used to build a custom solution for procure-topay. Low code simplifies the app-development process and gives you applications that are affordable. They’re also SaaS-based solutions. Costs scale with usage.
What does P2P automation mean for your business?
Even though procure-topay software is now used in many industries, there are many businesses that still rely on manual procedures. Spreadsheets and paper documents put your business at risk, while also preventing the strategic importance of your procurement process.
You can finally break free of these manual systems by automating the procure-topay process. This means that you will no longer have to manually fill out thousands of purchase order forms and process them. There will be no more back and forth trying to approve purchase orders. Spend less on mavericks and tails. No more assembling weak data in spreadsheets.
Automating your procure-topay process will reduce your delays, ensure that your vendors are paid on time, and give you more time to your team. You’ll also transform your procurement system into an agile system that will keep your business competitive as the marketplace changes.
can be affected by a number of unforeseeable events, which will affect your supply chain and, therefore, the procurement process. Politics, economic downturns and natural disasters can all play a part in changing the prices and availability of certain products and services.
Now. Imagine being able to navigate those unplanned events with ease, thanks to an agile and lean procure-topay system. The demand may change. Your supply chain could tremble. Your organization has the ability to adapt and secure your supply chain.