Implementing software solutions can simplify business operations considerably. Important business functions like finance and accounting, HR and Admin, procurement, and sales and marketing, are made up of data-intensive tasks that eat away productive work hours of employees. The manner in which they are implemented determines their success in optimizing the workflow. This blog explores how procure to pay solutions streamline the procurement function and the top 10 procure to pay solutions that you must consider for 2024.
Manual Procure to Pay – Why is it not Good for Your Organization?
The procure to pay is an arterial process that impacts several other business functions. Bottlenecks or delays in this arterial process affect the operations across the organization. When the procurement operations are conducted manually, the incidence of errors and delays is very high. Manual procure to pay systems are time-consuming, costly, and tedious to work with. During the initial stages of a business, it may be OK to work with a manual procure to pay solution, but as the company grows and the scope of operations expands, manual systems are not enough.
Processing purchase requisitions (PR) and purchase orders (PO) take way too much time in a manual system.
Here are 6 reasons why manual procure to pay systems are not good for your organization –
1. Cumbersome creation of PRs and POs
Creating purchase requisitions and purchase orders can be quite a task in a manual system. The stakeholders are unable to create PRs and POs independently. Moreover, the incidence of mismatch between the data in PRs and POs is high in a manual system.
2. Wrong routing of requests
A manual system entails much confusion in the routing of PRs and POs to appropriate channels and prerequisite lists. The role assignment is often unclear, hence, POs are routed to the wrong stakeholder.
3. Tedious 3-way matching
Matching of data on POs, PRs, and goods received notes (GRN) is a critical step in the procure to pay workflow. 3-way matching ensures that the data across all the procurement documents matches and that there is no duplication of PRs or POs. However, when this is done manually, it eats up a major chunk of the productive work hours of procurement personnel.
4. Compromised vendor relationships
Manual systems often result in delays and bottlenecks while processing transactions and approvals. When POs and invoice approvals are delayed, the communication with vendors is adversely affected. Late processing of invoices in turn leads to delayed payment to vendors. Disgruntled and dissatisfied vendors are a result of manual procure to pay processing.
5. Mismanaged contracts
Efficient contract management means that contracts are renewed on time and compliance requirements are adhered to. With a manual system, it becomes very difficult to track and manage contracts.
6. Weakened supply chain
Efficient supply chain management requires strategic sourcing and timely payments. The procurement team needs to comb through several supplier profiles before deciding on the right vendor. Vetting vendor profiles can get tedious when done manually. As mentioned earlier, delayed payments are expected out of manual procurement systems.
Manual procurement systems are ridden with inefficiencies and delays. A procure to pay solution eliminates the barriers to efficient and optimized purchasing to create better systems that free up teams for higher-level tasks. Moreover, purchase to pay solutions work in the background, enabling the procurement team to save on the procurement budget.
What is the Procure to Pay Solution?
As implied by the name, a procure to pay solution is a fully integrated solution designed to support an end-to-end process that begins with requisitioning of goods and services and ends with ready-to-pay files that can be uploaded into the accounts payable solution. Typically, procure to pay solutions use a scan and capture device, supplier portal, and/or a multi-enterprise network that enables suppliers to submit invoices electronically.
Gartner defines a procure to pay platform or suite as fully integrated solutions with automated workflows for requesting, procuring, receiving, and paying for goods and services across an enterprise. Procure-to-pay solutions support processes like e-purchasing and accounts payable invoice automation. E-purchasing is a self-service functionality that enables users to create requisitions for goods and services. Online forms, free-text orders, and e-catalogs are used in the e-purchasing process.
The accounts payable invoice automation system equips teams with the ability to capture and automate invoices, include rule-based matching against POs, or support account coding and approval workflows. Procure to pay software solutions also include features like e-invoicing for the exchange and storage of legally valid invoices in electronic format through one or more methods.
Procure to pay solutions provide end-to-end support for the entire procurement cycle. A comprehensive procure to pay platform usually comprises multiple modules for supplier management, contract management, invoicing, inventory management, and contract management. The procurement function has evolved continuously over the past decade, it ceases to be the service-centric function that is carried out on spreadsheets and paper forms. It now assumes a strategic role in business operations with technology at its core.
More organizations have started to embrace cloud-based procure to pay software solutions as they automate and streamline the source to settle processes rapidly. There are several procure to pay solutions available in the market, it is important to choose the one that suits specific organizational requirements.
Why Should You Automate the Procure to Pay Workflow?
I have a manual procure to pay system that works fine, why should I automate the workflow? Is that what is on your mind right now? Well, that is what most procurement leaders think. The thought of implementing a new digital procure to pay workflow can be overwhelming for most Chief Procurement Officers (CPOs). The decision to automate the procure to pay cycle is deliberated by the team, based on several factors like budget, feasibility, applicability, and process performance metrics.
Considering the many disadvantages that manual purchase to pay systems bring to the p2p workflow, businesses must consider automating the procure to pay cycle. Manual purchase to pay systems are time-consuming, costly, and frustrating for the procurement team. As companies grow, their scale of operations also increases proportionally, and it can get complicated to manage procurement effectively. Processing takes more time, mistakes rake up unnecessary spending, and teams increasingly feel the heat of running the system by hand. Why should you automate the procure to pay workflow?
Here is why –
Empower stakeholders to create PRs and POs independently. An automated process simplifies the process of creating PRs and POs by way of digital forms.
Enables clear routing of approvals through the appropriate channels and pre-requisite lists. Automated systems provide clear accountability within the procurement team. When the role of each team member is clear, it becomes easy to route the approvals to the appropriate stakeholders.
Automates the batching, coding, three-way matching, and processing of transactions. Categorizing purchase transactions is an important part of the procure-to-pay process that is time-consuming and tedious. 3-way matching is another time-consuming task that requires a lot of time and effort from the team. When such time-consuming processes are automated, it accelerates approval and streamlines the approval.
Speeds up payment for vendors. Paying vendors can be done quickly and efficiently through an integrated procure-to-pay platform. Timely payment to vendors fosters better vendor relationships.
Improves contract management. Contract management for a small-scale business may not require an automated system, but as business operations expand, contract management requires a more sophisticated system to manage contracts. Automating contract management streamlines vendor relationship management.
Strengthens supply chain. Automating the supply chain management enables strategic sourcing and timely payments.
Procure-to-pay software eliminates several barriers in the way of efficient and optimized purchasing and creates better systems that free up your teams for higher-level activities.
Need for an All-in-One P2P Platform
Having separate systems for each of the tasks in the procurement process can be as pointless as operating with a manual system. When separate systems are used for automating tasks in the procurement process, it becomes difficult to track the progress of each process and get a comprehensive view of the progress.
Why do you need a comprehensive procurement system as opposed to individual apps for specific purchasing functions? The answer is simple, a comprehensive procure to pay platform provides a single source of truth for the entire process. A strong procure to pay system enables better management of the entire procurement process.
Elimination of data silos is the main reason why an all-in-one automation platform is needed for your organization. With disparate systems, huge pieces of procurement data from multiple apps cannot interact with each other. A comprehensive procure to pay platform keeps things fluidic and seamless so that approved purchase requisitions trigger a PO with the right details that are entered into the system.
Procure to pay solutions are no longer the archaic, disparate systems that they used to be. They are embracing procure to pay digitization at a rapid pace to replicate and replace functionalities in traditional systems. There are several procure to pay solutions available in the market,
How do you know which is right for your organization?
What are the features that a procure to pay solution must have?
The dashboards in the procure to pay solution must be intuitive and customizable based on the user’s role or profile. An intuitive dashboard makes it easy to understand the progress of tasks in the procurement cycle. The user gets a bird’s eye view of the status of all tasks from the dashboard.
Accurate data matching
Several tasks in the procure to pay cycle are data intensive and require accurate matching of data. The 3-way matching process for instance requires accurate matching of data on purchase requisitions, purchase orders, invoices, and goods received notes. The procure to pay software must automatically match the data on invoices and purchase orders.
Real-time reports and analytics
One of the main reasons why businesses go for procure to pay solutions is real-time reports and analytics. Users get real-time insights into the progress of the procurement tasks via reports and analytics. Visual reports provide valuable insights so that the team stays updated on the progress of tasks.
Users must be able to manage their purchase to pay process on the go. For this, mobile compatibility is a must in the procure to pay software.
The procure to pay solution must be compatible with other systems that are already being used by the business. The procurement cloud must be seamlessly connected with other essential finance systems.
What to Automate in Procure to Pay Workflow?
A decade ago, procure to pay software was considered an extension of conventional ERP tools and accounting systems. Later on, on-premise procure to pay software solutions were in vogue. These solutions, however, provided a limited feature set that couldn’t scale up to requirements of a growing business.
Then came the cloud workflow automation software that provided businesses with the agility and flexibility required for scaling up operations. However, we need to bear in mind that not all tasks in the procure to pay workflow are suitable for automation. Only when the right tasks are automated, can we derive maximum benefits from workflow automation. Let us explore the tasks in the procure to pay workflow that are best suited for automation.
Purchase Requisition management
Purchase requisitions are the trigger for further processes in the procure to pay workflow. A purchase requisition contains complete information about the product/service requirement in the department. Specific details on the item name, quantity, and the date by which the item is required must be provided in the requisition.
Streamlining the creation and approval of purchase requisitions not only speeds up the process but brings in a greater level of accuracy and consistency. Automation of the purchase requisition process helps the team raise and process purchase requisitions, obtain approvals, and dispatch PRs to the procurement team. Tracking and managing purchase requisitions becomes easy and effective with an automated solution. Features like fluid forms, and on-the-go accessibility, help you capture, approve, and track purchase requests effectively.
The way vendors are engaged by the organization plays an important role in the procure to pay cycle. A good vendor management system transforms the way organizations work with vendors. Interaction and engagement of vendors must be transparent and proactive, to establish long-standing relationships that are mutually beneficial. Automating vendor management prevents the leakage of confidential supplier information and offers deeper visibility into vendor data and performance.
An automated system also provides consistent and accurate vendor data that can be analyzed to make strategic business decisions. Onboarding, maintaining, and managing vendors can be done with ease when you have a procure to pay software solution. These tools can also be used to track every aspect of the vendor performance and contractual obligations such as delivery timelines, quality of the product/service, and delivery modes, etc. When there is any violation of policies, then the system will automatically notify/alert the respective stakeholders.
Purchase order management
Purchase orders are formal requests for goods/services that are issued to vendors by the buyer. The data on the purchase order should match with that on the purchase requisition in terms of the specifications of the product/service being purchased. Tracking the status of the purchase order throughout the procedure to pay cycle becomes easy with a procure to pay solution.
The procurement team can help organizations process POs, create purchase orders, obtain PO approvals, and dispatch POs to vendors. Once a purchase requisition is approved, the automated system can issue POs and generate orders automatically from the data in purchase requisitions. At any given point in time, a procure to pay solution provides visibility on the –
- POs and PRs under process
- List of orders that are placed with vendors
- The cost agreed upon and the quantity of items being purchased
- Status of a purchase order
- Estimated time of delivery
Timely payment of invoices is important to maintain vendor relationships. When invoice management is automated, it becomes easy to process, approve, and store invoices. Rule-based processing takes care of the routing and matching of invoices in the procure-to-pay cycle. Automated invoice processing enables stakeholders to review and approve invoices on the go. These solutions are also capable of managing exceptions in the invoice review and approval process. Automatic notifications and alerts are issued when information on the PO does not match that in the purchase requisition.
Cloud-based solutions like Cflow enable stakeholders to manage their procurement processes even when they are on the go. Cflow is a cloud BPM that can automate the procure-to-pay workflow among other key business processes, within a matter of minutes. No coding is required, you simply have to drag and drop the workflow elements as per the requirements of the workflow.
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Top 10 Procure to Pay Solutions for 2023
Choosing the right procure to pay solution can be challenging, especially with so many automation solutions in the market. The success of workflow automation depends largely on the automation solution that is chosen. We have curated a list of top 10 procure to pay solutions that you can consider for making an informed decision on the software that works best for your business.
No, we are not beating our own drums here! Cflow is a versatile workflow automation solution that comes with a rich feature set that simplifies workflow automation greatly. The visual form builder in Cflow does away with any coding requirements and uses easy-to-understand visual workflow elements to create the procure to pay workflow. Not just the procure to pay workflow, you can create several other workflows that a business requires. Real-time reporting and analytics, extreme customization, high levels of data safety and security, and rules-driven automation are some of the features that Cflow brings to the table.
2. Coupa BSM Platform
This is an all-inclusive business spending platform that provides complete control over enterprise expenses. This unified business spend management solution streamlines spend control, purchasing, and accounts payable functions.
3. SAP Ariba Buying and Invoicing
You can replace complex steps in the buying and invoicing process with the advanced tools provided by this solution. The user-friendly, cloud-based solution speeds up procurement, minimizes errors, cuts costs, and boots productivity.
4. PRM360 Simplified Procure to Pay
A robust cloud-based procurement software that can help automate and streamline the procure to pay process while cutting costs and mitigating tasks. Creating requisitions, sourcing, inventory management, and tracking purchase orders are some of the tasks that can be performed with the software.
5. Basware P2P
This P2P automation software enables automation of invoice ingestion, touchless accounts payable, and e-procurement. This software creates significant cost reduction and minimizes risk.
6. Jagger P2P
With this automation solution, you can spend strategically by creating flexible accounts payable processes. You can compare details and pricing from hosted catalogs, punchouts, and internal inventory with the OneShop feature.
7. GEP SMART
You can boost adoption, compliance, and spending under management with the easy-to-use GEP SMART solution. This procure-to-pay solution is capable of bringing large amounts of spend under management by eliminating off-contract, maverick buying.
8. Proactis Procure to Pay
The entire buying process can be effectively controlled by the software. This software is intrinsically linked to your operational procurement processes, from order requisitioning to the processing of invoices.
9. Oracle Fusion Cloud Procurement
This procurement solution gives you the agility to adopt new business models and processes quickly. Implementation of this software helps you reduce costs, sharpen forecasts, and innovate faster.
10. Zycus Source to pay Suite
This is an organically built cognitive procurement suite leveraging artificial intelligence and cognitive analysis for holistic procurement transformation.
Choosing to streamline procure to pay operations must be supported by the right procure to pay solution. When you choose the right software, the entire automation process becomes easy and effective.
Cflow is a reliable and versatile workflow automation solution that is trusted by organizations across the globe to optimize their business processes and interested in knowing more? Just sign up for the free trial to experience the power of Cflow.
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