The procure-to-pay process is efficient because of the adoption of the latest technologies in procurement. The primary goal of most technology in procurement is creating value and efficiency in the entire lifecycle of purchasing activity.
Procurement is one of the most crucial components of an organization irrespective of the size of the organization. Under procurement, there are various other functions like contract management, supplier relationships, supply chain sourcing, and management, among others. Because of this, it is essential that the entire P2P system is digitalized and the benefits of it are realized much sooner than later. Here are some benefits of a Procure to Pay (P2P) system.
Benefits of a Procure to Pay (P2P) System
The benefits of a P2P system will be better realized when your company automates the entire purchase-to-pay process. When your organization implements an eProcurement solution, you will see that your procurement teams will find more time on their hands to do cost-effective essential tasks.
An automated P2P system will also help your company improve spend management along with supply chain management. Let’s have a look at some positive changes your company can expect from a P2P system.
- Provides better visibility and transparency
A procure-to-pay solution ensures transparency and visibility throughout your organization’s supply chain. The buyer and the vendor can both view the status of the invoice, payment terms, etc. in real-time. When your business has a transparent P2P process, you can minimize and prevent the duplication of records.
- Efficient data management for better decision-making
Efficient and robust P2P systems offer real-time reporting and analytics which help in tracking crucial spending in your company. You can use real-time and historical data to pull up reports which will help your organization gain better control of the cash flow situation and working capital. This will increase the overall efficiency of spend tracking of your business.
- Drastically lowers invoice processing costs
After implementing an automated procure-to-pay system, your company will benefit in various ways but most importantly, you will save on costs. Since your company has gone paperless because of the P2P system, it will save you immense time and cost.
This will allow your employees to work on more strategic tasks rather than doing repetitive manual invoicing tasks – which are now better accomplished by automation.
- Better negotiating power
Suppliers have access to all the information they need about the buyer and the company they are doing business with. This transparency is provided by the automated P2P system your organization is using. When suppliers are sure of when they will be receiving payments, they might be willing to offer a good deal to the buyers. They might be more open to negotiating as they are also likely to gain revenues from a good deal.
- Improvement in supplier relationships
A good P2P system comes with a supplier portal that is efficient and easy to use. With such a portal, suppliers can exactly know when they can expect payment and this enables them to make prudent business decisions. A systematic supplier portal is also helpful to the buyers as they gain greater visibility into suppliers’ invoices, etc.
- Faster resolution of smaller, otherwise unresolved tasks
With an automated P2P system, your company’s procurement team can spend more time doing functions that add strategic value. This frees up more time and employees can spend this time resolving other pending tasks.
- Finally, streamlines procurement processes
The procure-to-pay system, when automated, makes everything transparent and cost-effective in your organization. The entire procurement cycle, right from creating a requisition to selecting suppliers, to making payments and logging invoices – everything is tracked and recorded under one system. Approvals happen faster and POs are sent electronically to the suppliers seamlessly. The entire P2P process is streamlined because of automated software.
To conclude, it will be a smart decision if your company decides to invest in a P2P system that is automated. This will guarantee your organization transparency, better spend tracking, a string audit trail, and a seamless purchasing process.
Investing in procure-to-pay technology guarantees optimized efficiencies while improving the overall performance of your procurement teams. This will generate better profits for your company and also give you better insights about your suppliers.
With Bellwether’s software, you can realize all of the above benefits and take your organization’s purchasing game to the next level.