By the end of this post, you’ll know what Procure-to-Pay (P2P) is, what it means to have an efficient P2P system, and the best Procure to Pay solution to use. We’ll start at the top.
What is Procure-to-Pay Process?
The Procure-to-Pay process refers to how a business or organization buys the raw materials and services it needs to do business.
The Procure-to-Pay Flow
P2P is a procedure. It involves several stages from identifying what a business needs to approving invoices and supplier payments, as shown in the image below.
As you can tell already, Procure-to-Pay is a complex process that requires strictness. Put differently; every step of the procedure needs proper planning and execution.
Therefore, it makes perfect sense to ensure that the process is as efficient as possible to avoid errors and, most importantly, enable you to get what you procured.
A well-organized P2P procedure, by extension, ensures that you not only pay for what you ordered but also what your business needs – and that’s where a Procure-to-Pay software comes in.
What is Procure-to-Pay Software?
Procure-to-Pay software is a cloud-based, data-driven solution that allows you to integrate purchasing and accounts payable systems for greater efficiency when procuring.
Benefits of Procure-to-Pay Software
P2P software is beneficial to your business or organization in more than one way. What follows is a rundown of reasons you should integrate e-procurement software into your accounting system.
Improved Efficiency via Automation
A manual procurement process is highly inefficient. We’re talking about human errors, delays, invoicing mistyping, etc.
A P2P solution eliminates these inefficiencies by allowing your procurement team to automate workflow at every stage.
Further, automation helps save time. According to the American Productivity and Quality Center report, automating the procurement process can cut down the time it takes to complete the payment cycle by 50 percent.
Besides, businesses that use manual procurement process about 615.7 purchase orders per full-time employee compared to an impressive 1302.1 purchase orders for companies that use automation.
The faster your process purchase orders, the more the savings for your business. Plus, companies that use cloud automation project a 15 percent year-over-year revenue growth.
E-procurement is beneficial to your IT department as well. More specifically, Procure-to-Pay software cuts down resources IT requires while ensuring that employees in the department remain connected.
And to top it all off, you can integrate reminders into your procurement system for improved workflow, faster approval of invoices, and quicker payments.
Improved Relationships with your Suppliers
Supplier management is essential. A Procure-to-Pay solution enables you to manage your supply chain in several ways including;
It simplifies procurement, allowing you to pay your suppliers on time. It ensures that you’re more strategic with your purchases. You only buy what your business needs. Plus, you can predict future demand for products/services. AP automation allows the exchange of e-invoices with your suppliers. A central point of data management and communications ensures a more effective interaction with your suppliers. The ripple effect is less miscommunication and quick resolving of issues. It allows quick and responsive procurement creation, review, and negotiations. That way, both parties can resolve any arising issues quickly. On top of that, it creates the correct atmosphere to negotiate better terms, prices, and collaboration. It enables the auto-population of your supplier’s information across your accounting, communication, and marketing departments.
You can evaluate the performance of each supplier, making it easier to pinpoint the best trading partner. With the ability to access your supplier’s details from a dashboard, you can get real-time feedback about the procurement progress. Moreover, you can make suggestions on how to improve the process for the benefit of both parties.
Improved Procurement Process
Procurement automation means that you can track the process from start to finish. It implies that you can re-evaluate things such as the prices, terms, and conditions for everything you’re planning to buy before making the payment.
P2P software improves these procedures significantly. It allows you to collect every transaction data and store it in a central, secure location. That way, the information is readily available for audit.
When you automate procurement, you’re, in essence, securing every payment that requires approval before releasing funds to the supplier.
A cloud-based, single data management point means that you can review the terms and conditions per supplier. Further, it allows you to verify procurement documents from the purchase order to the final invoice. With such attention to detail, it becomes easier to eliminate fraud and reduce typing mistakes.
Improved Business Intelligence
One of the best ways to know how your business is performing is to keep track of transactions. Procure-to-Pay software offers an excellent opportunity to generate valuable data about your business. For instance, you can determine what drives demand, potential savings, your most reliable suppliers, etc. With such information, you can make better purchasing decisions and, most importantly, steer your business in the right direction. What’s more? You can predict demand, sales, production, and profits.
Take Charge of Your Procure-to-Pay Process
To enjoy the benefits highlighted above, you must choose a reliable Procure-to-Pay solution. You want one that can handle your business needs too. Unimaze software offers a comprehensive Procure-to-Pay solution with everything you need to help your business stay ahead of the curve when dealing with suppliers. The software supports automation geared toward improving how to procure and pay for products and services for your business. Our e-procurement solution is easy to use and understand. The dashboard is intuitive, complete with an easy-to-navigate template to ensure that you and your get your team started right off the box. Even more impressive, the Unimaze P2P software is compatible with most ERP and accounting systems. Reduce costs, risks, and errors. Take your Procure-to-Pay processes to the next level without leaving a hole in your budget with Unimaze e-procurement software. And, yes, we will help you with implementation and provide ongoing support.
…before you go
Procure-to-Pay Frequently Asked Questions (FAQs)
- Is Procure-to-Pay the same as accounts payable?
- Is the source to pay and Procure-to-Pay the same?
-No. A source-to-pay solution, as the name suggests, gives you the ability to source new suppliers, including running an RFQ or RFP process and negotiating a contract.
- How do I manage procurement?
-We recommend using Procure-to-Pay software such as the Unimaze P2P solution to give you the visibility you need to control spending and approve suppliers.