Companies that process massive amounts of invoices must have clear policies and procedures in place. It is imperative that any organization has procedures and systems in place to minimize bureaucracy, error, risk and inefficiencies. A procure-to-pay solution offers a seamless process from point of order to payment. At Ivalua, we’ve seen how a Procure-to-Pay business process ensures sustained benefits through good buying practices, improves visibility and swifter issue resolution, and enables proactive management of suppliers.
What are the symptoms of poor procure-to-pay processes?
While there are many and varied, the symptoms can be boiled down to “proactive vs. reactive.” It’s easy to fall into a trap of processing invoices as soon as they are received. It’s more efficient, both in time and cash-flow, to work through a “Pay by Terms” model where invoices are saved up and paid on the due date. Paying ad hoc is inefficient; it always takes longer and allows cash – that could be earning interest – out of an account sooner than it needs to go.
You need a procure-to-pay process if your organization is guilty of the following:
- Frequent duplicate payments
- Payments are made without internal approval
- Spend is led away from preferred suppliers
- Lots of new suppliers added on a regular basis
- Retroactive orders to cover invoices received
What are the benefits of procure-to-pay business process?
The most obvious benefit is that a procure-to-pay process can bring light to inefficiencies and gives businesses the ability to proactively manage suppliers. For organizations, this means employees can easily and quickly buy all the goods and services need from preferred contracts, ensures they stay within budget and work with required approvals. Manual labor involving fixing invoicing issues caused by suppliers or missing orders and receipts are more easily resolved.
A procure-to-pay platform can offer:
- A single place for goods, services, components, tools and travel
- Supplier, contract, legal tax and policy compliance
- Electronic capture of all B2B transactions
- Reduced errors, fraud and risk
- Buying at negotiated prices and within budget
Case in Point
Many of the procure-to-pay challenges we try to solve with new Ivalua customers centers around lack of compliance and governance, disparate systems and processes, and lack of adoption. Key approaches that have been successful in addressing these challenges center around e-invoicing and automation to drive down operational costs and increase process efficiency. The adoption of e-invoicing solutions minimizes errors and offers many benefits to both suppliers and the business.
Case Study #1: Leading Information Services provider
- Pain-Point: Purchasing compliance and collaboration
- Solution: Automate end-to-end processes
- Reduction in maverick buys, 95% compliance
- Automatic invoice reconciliation with POs, Goods Receipts and Contracts, 85% suppliers submitting invoices and 95% accuracy.
- Eliminate overpayment and reduce fraud; prevent payments to unknown suppliers or missing goods: 100% compliance
Case Study #2: Leading Financial Services and Mortgage provider
- Pain-Point: Manage supplier risk and visibility
- Solution: Implement end-to-end solution to gain visibility into spend and manage supplier risk
- 100% of spend analyzed; 2000 sourcing events executed
- Better manage suppliers; 63 suppliers per auction, 6000 active online contracts