When it comes to procurement, understanding and following the workflow model is essential to an efficient Procure-to-Pay (P2P) process. The most common P2P workflow begins with making a purchase request, followed by a purchase order (PO). Once the purchase order is approved, the order is sent to the supplier and goods or services are received. Once items are received, invoices are created (two or three-way matching should be performed) and once the invoice is approved, they are exported for payment to the vendor.
Though P2P seems to be a fairly, straight-forward process, many organizations struggle with late payments, inaccurate billings and payment amounts, double payments, missed discount opportunities, critical inventory out-of-stock, lengthy approval waiting periods, lack of visibility into department budgets, and so on. By automating a P2P process, you are essentially automating the workflow. An automated system pushes the purchase request all the way through to payment, and can reduce cycle-time by 50%. Organizations that do not take steps to automate transactional activities simply cannot match the efficiency and effectiveness of those that do. If you have not automated, you are most likely falling behind your competitors. According to APQC’s Open Standards Benchmarking in procurement, 82 percent of responding organizations use an automated, e-procurement solution.
What are you waiting for? The time is now! Improved insight and control over purchasing will have a clear impact on your bottom line:
- Greater procurement efficiency drives your overall costs down.
- Increase the accuracy of financial statements and forecasts by reducing manual, error-prone efforts.
- Maximize your sourcing negotiations’ value and return on investment (ROI).
- Better understand your spend and help ensure contract compliance.
- Minimize the risks of vendor overcharge, maverick buying from non-contract vendors and losing discounts.
- Eliminate time-consuming manual file searches for auditing with electronic document retrieval.
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