Exploring AP Technologies: Complete Procure-to-Pay Solutions

Perhaps the greatest value in adopting a state-of-the-industry accounts payable solution is the cost-savings resulting from a more automatic, streamlined, and digitized process. But when it comes to managing spend, isn’t looking at AP costs a lot like looking at just one side of a coin? Flip it around to consider procurement, and you’ve got a more comprehensive picture upon which to measure operational economy.

A New Way To Drive Efficiency

Connecting procurement and payment processes in one system can provide a company with opportunities for significant savings, not to mention greater collaboration between functional areas. As explained by Ardent Partners in their report, ePayables 2015: Higher Ground, the opportunities procurement and finance can jointly pursue come from greater visibility into spend, invoices, and processes across the P2P spectrum. By sharing an interface and accessing the same data, decision-makers from both departments have richer information at their fingertips that can result in better compliance and cash management.

According to the Ardent Partners study, 32% of enterprises currently use a complete procure-to-pay solution and 51% plan to implement one over the next 12-24 months. What’s more, 45% of Best in Class AP operations have adopted on versus 24% of all others—and Best on Class companies are 88% more likely to employ P2P automation as part of their overall operations.

From Point of Order to Payment

By definition, a complete procure-to-pay solution enables end-to-end flow of data between an item’s purchase and its payment. With built-in controls to help enforce purchase and budget compliance—and maintain a streamlined approvals process—the system removes many of the traditionally manual tasks involved at every step in-between. And when integrated with a company’s general ledger, ERP, or CRM systems, as well as data from banks, vendors, and other partners, the P2P solution becomes an even greater boon to efficiency.

Considerations

When embarking on an exploration into the suitability of a complete procure-to-pay solution, decision-makers need a handle on what the organization is challenged with. A consultant from Bluefin Payment System recommends answering these ten questions:

• Do you receive lots of paper supplier and vendor invoices, goods receipts and credit notes?
• Have you ever thought about incentivizing your suppliers and vendors to self-serve?
• How clean is your customer, supplier and vendor data?
• Have you implemented a ‘No Purchase Order, no pay’ policy?
• Do you have significant volumes of low value suppliers and vendors creating hundreds of thousands of invoices per annum?
• Is your DSO running too high?
• Have you attempted to centralize invoice processing for global processing of invoices yet still need to have localized support for in-market exception processing?
• Do you often suffer from price and quantity blocking and late payments and poor supplier and vendors relations?
• How do you focus your business on value added strategic processes?
• How do you drive down your interaction costs from suppliers and vendors?

With the introduction of any new technology solution, it’s critical to perform due diligence and carefully vet vendors, ensure key departmental buy-in, and set goals for the new systems’ performance. A procure-to-pay system is designed to touch a variety of processes and has the potential to yield powerful results. More than just an AP solution, it’s truly an operational game-changer.

Read Exploring AP Technologies: Supplier Portals for insights into a new way to interact with vendors. And stay tuned to learn about other technologies that are changing the way AP departments work.