Do you know that 80% of organisations still use manual tools to manage their P2P cycle? That said, most procurement leaders will try to automate procurement in the future.
Usually, organisations integrate their P2P (procure-to-pay) process with their ERP or accounting software. However, this is not beneficial in the long run.
Let’s see how automation can easily help overcome most P2P process challenges.
Challenges With the Manual P2P Process
The traditional P2P processes often rely on manual tasks and paper-based systems. That’s why the manual process is prone to several inefficiencies, such as:
- Slow Workflows
Manually processing requisition approval or generating purchase orders takes a lot of time. Additionally, manually processing invoices or payment authorisation calls for slow procurement processing.
- Errors in Data Entry
Manual procurement involves manual data entry across multiple systems. Imagine filling out a paper for requisition and getting it routed for approvals through various desks. That increases the chances of human errors. These error rates can range up to 5% and may eventually lead to process delays and discrepancies.
- Lack of Visibility
A centralised system makes tracking order progress, approvals, and payments across the supply chain easier. Companies face process delays in the entire supply chainHowever if not managed properly, companies can avoid process delays throughout the supply chain if managed properly. However, if managed properly, companies can avoid process delays throughout the supply chain.
- Limited Control and Compliance
If a procure-to-pay process takes a manual route, companies can no longer track their spending limits or compliance with company policies. For instance, without automated controls, the management may hardly track department spending or prevent maverick buying.
Also Read: How Does P2P Automation Surpass Traditional Barriers?
P2P Automation: How to Transform the Procurement Cycle?
An ideal P2P automation software automates the entire procure-to-pay cycle. The software carries out many repetitive tasks to save manual time.
In this regard, let’s look at some USPs of an ideal procure-to-pay software.
- Automated Requisitions and Approvals
Your employees can electronically submit requisitions, specify details, and request approvals through predefined workflows. The automation frees your management from tedious paperwork and speeds up approval.
- Streamlined Purchase Order Generation:
Once approved, requisitions automatically convert into purchase orders. Since no manual data entry is involved, you can rest assured of high order accuracy.
- Efficient Invoice Processing:
P2P software can automatically analyse invoice information and match it with purchase orders and receipts to flag discrepancies.
- Improved Payment Processing:
Thanks to the automated workflows, all invoices are processed promptly for approval and payments as per the pre-defined payment terms.
Also Read: Streamlining Procurement: The Power of P2P Automation
Benefits of P2P Automation
Correctly implementing P2P automation offers numerous advantages, such as:
- Reduced costs
Automation takes care of many manual procurements and payment tasks, saving you on manual labour costs. It also minimises errors, leading to cost savings from duplicate orders or incorrect payments.
- Improved Accuracy
Automated data entry eliminates human errors and ensures consistency throughout the P2P process.
- Increased Compliance
P2P software sets pre-defined rules and approval workflows so that the process, by default, adheres to company policies and regulations.
Also Read: P2P Automation: The Backbone of Resilient Businesses
How to Implement P2P Automation?
Under the right strategy, P2P automation is a high-return investment. Here is how you should get started.
- Analyse your current P2P process:
Identify which areas of your P2P process need improvement, and learn the challenges posing delays or inefficiencies.
- State Automating Goals
Determine what you aim to achieve with P2P automation, such as faster approvals, improved data accuracy, or better spend visibility.
- Evaluate P2P Software Solutions
Research and compare P2P software options to find one that fits your needs and budget.
- Develop a Phased Implementation Plan
Now, you are all set to automate key areas of the P2P process. Start slow and gradually scale up as your team becomes comfortable with the new systems.
Automating the P2P process helps you reduce processing costs, minimizes human errors, improves data accuracy, and enables you to adhere to company policies and regulations. However, you need to carry out the automation with the help of an expert to save yourself from costly mistakes and redos.
Are you seeking a robust P2P automation solution to increase procurement efficiency?
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