Automation of the Procure to Pay function, is this the “Holy Grail” everyone is after?

ThumbsupspeachA colleague says “So, as the finance director you oversee purchasing and spend decisions?” Your response is likely to be “Yes, you’re right I am responsible for spend decisions and would like to see as little operating cost as possible.”

So what is Procurement?

“Procurement means the whole process of acquisition from third parties (including logistical aspects) and covers goods, services and construction projects”– Crown Commercial Service (Government)

‘Procurement’ covers all activities that involve buying, contracting, purchasing, sourcing or tendering; it incorporates lots of divisions and lots of personnel. Procurement could, account for up to around 50% of the costs to an organisation, so no pressure at all to try and reduce the spend!

By seeing the procure-to-pay process in its entirety, buying and paying for goods and services, to the request for the product by the operations staff, to the issuance of the purchase order, receipt of the goods, and finally payment of the invoice. You can see quite how much this involves, a lot of which is manually operated.

P2P Focus

Over the past few years there has been more focus on procure-to-pay, with a marked increase in conferences, seminars and also organisations wanting to specialise in improvements in P2P. The focus now is on procurement and with it accounting for so much of your business, it’s about time. So what are the problems of procurement?

Manual Rules the Roost

‘Time is money’ and nothing could be truer than this in procurement. Currently a lot of the processes and systems are still very manual, this can be a big problem, it can mean time delays, manual input errors and frustrations for those involved. Here are some key things that come up time and time again in procurement as needed for improvement, here we will address a number of these.

  • Reduce admin
  • Improve efficiencies
  • Having a clear insight
  • System integration problems – that is when you find a solution!
Reduce Admin

As an organisation you currently have very manual processes, with lots of data input. Wouldn’t you like to change that? With a few alterations, you really can re-engineer the division of labour. I’m sure currently internally you are:

  • Looking at info
  • Registering suppliers
  • Processing / approving quotes
  • Checking budget availability
  • Raising PO’s
  • Chasing sign-off
  • Checking goods receipts
  • PO Matching
  • Processing invoices
  • Approving payments

And what are the suppliers doing?

  • Submitting quotations
  • Sending invoices

This is typical scenario with your employees doing 80% of the admin load and suppliers doing 20%, it’s about time the tables were turned.

So here’s how it works

With a P2P system such as Invenio’s P2P Solutions, you can have the following benefits:

Reducing your admin – Suppliers register and manage their own master data and submit quotes and invoices.

Improving your efficiencies – ‘One click approvals turning quotes to purchase orders’, fully automated workflows for multi-level spend authorisation, in-built security, budget allocation and approval processes to make it easy, fast and efficient.

Giving you clear insight – Manage budgets and authorisations on one global platform. For ready visibility across all cost-centres, projects, budgets and geographical locations.

Eradicating integration and consolidation headaches – Purchasing information sits inside SAP and so it’s always ready, always up to date and becomes a part of your existing investment in SAP.

All of this results in the ultimate goal of the division of labour being reversed. Some processes are totally automated and will flow through the system without the need for any manual handling, resulting in speedier processes and less laborious tasks. You really can now have your employees approving quotes and approving payments, all whilst the supplier is now:

  • Registering and doing data maintenance
  • Uploading quotes
  • Notifying goods and services delivery
  • Raising invoices

As the financial director, wouldn’t you like to say “well yes, that slick operation is mine, we have created a system to reduce costs and to make procurement processes more streamlined and automated”. The overall result being a reduction of costs for the whole procurement team.

To find out more about how Invenio’s P2P Solutions P2P can help you to become automated, please do get in touch.