Why Organizations Must Integrate Procure-to-Pay Software
There has been an increased focus on improving the Procure-to-Pay process over the years. Both CFOs and CPOs are constantly looking for ways to reduce costs and increase savings through enhanced efficiency. Manual and paper intensive P2P processes bring a wealth of challenges like inefficiency, lack of spend management visibility, inability to ensure contract compliance etc. On the other hand, automation helps organizations to better understand their spend, increase compliance to contracts, negotiate for better pricing, reducing maverick spend, to name a few.
Key Benefits to Using Procure-to-Pay Software
Enhanced Visibility for Better Decisions: An automated procure-to-pay system helps to eradicate unnecessary costs in manual procurement processes and increases visibility, compliance and sourcing velocity, while reducing risk at every stage of the procurement lifecycle. Automation helps both buyers and suppliers to obtain real-time, accurate data to make informed decisions. It improves processing efficiency by removing paper from the equation.
An automated system provides end to end visibility between POs, invoices and goods receipt documents to ensure that goods have been properly received before issuing payment. As a result it protects from taking cash flow decisions based on incomplete data.
Easy access to records: When you have procure-to-pay software, all of your data on suppliers are digitally and conveniently stored in a centralized repository, making them easily accessible at the time of sourcing. Buyers can easily access the online catalogs from existing or new suppliers, review and approve purchase orders and check status of shipments in electronic formats. This means you spend less time in scouting for documents taking the guesswork out of locating documents. In addition, the cloud based system provides dedicated permissions, access, and encryption features to allow multiple level of scope of approval based on organization’s team structure. The organization can assign specific authority to users for raising purchase orders, define the spend limit etc. A procure-to-pay system generates automated reminders to alert users when requisition/purchase orders are pending and require their approval or there is a breach of purchasing policy.
Catalogue Management: An organization can have thousands of contract records stored but only few catalogues from suppliers. Often organizations prefer to source a specific item from an existing supplier from whom the same item was ordered in the past. The procurement officer looks out for the catalogue of the existing supplier to find all information about the required item. But often, it happens that even though the contract of a previous order is available with the supplier, the catalogue is not available. In some other cases, it becomes very difficult to find the old contract of the supplier from the stack of thousands of other contracts. In such scenarios, an automated P2P system like the one offered by Zycus helps procurement professionals to link the procure-to-pay software with the contract management system and create a centralized repository to store contracts in the absence of catalogues of a supplier. The system allows the procurement officer to save the contract when catalogues are not available at the time of contracting. This helps the organization to easily fetch details and historical cost of a previously ordered item from a particular supplier at the time of sourcing even when the catalogue is not available.
Proactive Reporting and Analysis:
The best use of automation is the ability to create reports that give deep insight into the supplier performance, examine spend at various levels, whether suppliers are complying with pre-negotiated terms, status of contracts and shipments etc. The real time reports helps to provide valuable business intelligence for strategic spend analysis and reduction of maverick spend.
Leveraging the Benefits of Efficiency:
Automation shortens the approval cycle time and reduces the possibility of missing payment deadlines. This prevents late payment penalties, opens the scope for leveraging supplier discounts and improving supplier relationships.