As we have mentioned before, the procure-to-pay cycle is a complex combination of steps involving several stakeholders inside and outside of the Procurement organization. The process requires layers of approval, reporting and auditability that become difficult to manage in paper-driven, manual environments. Automating the procure-to-pay process offers tangible benefits in cost savings, user adoption, and actionable insights about the business.
Challenges of Manual Procure-to-Pay
Inefficient: Many of the steps in a manual procure-to-pay process are administrative. Routing a requisition for approval, finding the right product, and signing checks for payments are a few examples of activities that must be accomplished to ensure a smooth process, but generally interrupt other, high-value activities and squander time in a manual environment.
Error-prone: A manual procure-to-pay process, like many other manual processes, is open to any number of user errors. Whether it is the transposition of numbers, incorrect routings, or addressing a check to an incorrect vendor, human error can create significant follow-on work to correct any errors.
Risk of non-compliance or improper payments: Manual purchasing processes are consuming and cumbersome. A geographically dispersed business increases the complexity. Staff, often under time pressure, will find ways to work around the official process for the sake of expediency, perhaps using a credit card for the purchase and buying off-contract items. On the payments side, the difficulty auditing the manual process through 3-way matching opens up the risk of overpaying for negotiated goods or services.
Reporting Complexity: Analyzing buying for trends in a manual environment takes time and can be prone to human error, creating reports that may not be reliable.
Benefits of Automating the Procure-to-Pay Cycle
Automating the procure-to-pay cycle with technologies like BuyerQuest can have a dramatic impact on the business.
Speed: Using smart, context-based search through BuyerQuest Marketplace, buyers can easily find and purchase the items they need. Procurement can be sure that the products purchased are under contract and seamlessly routed for approval. 3-way matching is simplified through automation.
Ease of Tracking/Auditing: Automating the purchasing and approvals process makes mining the data for reports and auditing streamlined.
Encourages compliance: An easy-to-use, intuitive, automated buying process increases user adoption. Casual users are more likely to buy within the automation knowing that they can quickly find the product or service they need.
Actionable Reporting: With activities driven through automation, reporting becomes simplified. Executives can analyze purchasing for trends and savings opportunities.
Automating the procure-to-pay cycle offers quantifiable benefits to both the Procurement organization and the business as a whole.