Best P2P practices and their benefits

Adapting automation

Procurement and accounts payable departments deal with hundreds of purchase requisition forms, purchase orders, goods receipt notes, invoices, and payments. It can be predicted that human error can occur in one manual entry or another. Automation of the P2P cycle ensures that no such mistake takes place and the cycle completes smoothly.

By properly adapting automation, organizations can reduce the need for manual rerouting of approval requests, achieve faster cycle times, boost purchase order system processing, and minimize supplier lead times. Process automation using procure-to-pay software enables firms to acquire orders from chosen suppliers at agreed pricing without human paperwork and spreadsheet difficulties.

Through a P2P solution, an organization can have more insight into supplier performance, including risks, behavioral patterns, and service levels, so they can see any problems early and make the best decisions with the most value.

Benefits of P2P

♦ Reducing Costs and Direct Spends

According to McKinsey, in a faulty P2P system, 1%–3% of overall expenditure is lost, and 5%–10% of transactions need rework, invoice reconciliation, or fail to recoup payment discounts. Through procurement automation, organizations can save these costs and optimize their direct spend by having clear visibility of the flow of money.

♦ Gaining insights through spend analysis

Department heads have insight into real-time strategic data across the whole procurement landscape, allowing them to make smarter spending decisions and save money. As a result, procurement and finance departments, in particular, have a greater understanding of how corporate funds are spent and where savings might be made.

♦ Enhancing supplier collaboration

Suppliers prefer to have open lines of communication with their customers. The more information they have, the better. The best procure-to-pay systems lower transaction costs by removing obstacles to access, increasing insight into the supplier-buyer relationship, and lowering transaction costs.

♦ Improved compliance maintenance

On average 15%–30% of purchases do not comply with contracts, i.e., done through RFQ even though a price-negotiated contract exists. Through P2P software, effective contract procedures and transparent spend enable enterprises to achieve contract compliance and to achieve savings through efficient expenditure. This also limits maverick spend and dark purchasing, hence ensuring that every individual and transaction involved in the cycle is compliant with the organizational rules and policies.

Implementing P2P software

Integrating the procurement department and accounts payable department seamlessly is critical to the success of any organization. It ensures that your whole P2P cycle operates without any delays or bottlenecks. The best way to increase the efficiency of this cycle is to automate it using the right procurement solutions.

Using P2P automation solutions, organizations can maximize the productivity of the whole procurement team and streamline the whole process in the most effective way. Through visibility and control, it is guaranteed that there will be no needless spend that affects the organization’s bottom line.

Moreover, with the help of P2P software, organizations can identify the current and potential areas that need improvements and the optimization that can provide them with a competitive edge in today’s dynamic and challenging markets.