By Andy Hamilton, UK Business Development Manager
Purchase-to-Pay (P2P) bridges Finance, Procurement and the wider business and drives value into every corner, and in the final article in this series, we look at P2P’s positive impact on Procurement.
An agile P2P software solution
provides efficient, well-controlled ways to provide employees with convenient access to comprehensive supplier content. It enables employees to browse supplier sources such as catalogues and websites online to find, then purchase or request, the item or service they need from an approved supplier.
This capability is essential to achieving a high percentage of spend under management. Employees are far more likely to buy the right item from the right supplier when it’s easier to do so than it is to buy from another source. Providing employees with the ability to search for and select the item or service that best fits their needs from within the P2P system streamlines the purchase process for the employee and drives dramatically higher on-contract spend for the organisation.
The purchase request will be compared to corporate rules based on who is making the request, the cost, the spend category, and other criteria. In doing so, the P2P system supports on-contract spend and minimises the size of supplier database, maverick buying and tail-end spend.
Efficient invoice payment approval maintains healthier supplier relationships and attracts strategic suppliers. For approval, the system should be able to electronically route the request to the right manager. POs will automatically be placed for approved requests. When the invoice arrives, it will be electronically matched against what was ordered and received, and against applicable contract terms.
The task of contract management itself is to ensure that your suppliers live up to the agreement and, more broadly, to achieve maximum value in your expenditure by continuously seeking further savings and added value. This has to be an ongoing effort throughout the contract lifecycle, involving consistent monitoring and reporting, and the data from a suitable P2P system will help helps optimise contract and supplier performance and management.
We have now established why an agile P2P system is the linchpin for your spend management and wider strategy, and you can read the other articles in the series below:
It would be interesting to hear how you use your P2P to support your organisations strategy, and if you have any questions or need any help you can contact me at [email protected]