Frequently Asked Questions
What is a procure-to-pay system?
A procure-to-pay system manages the creation and approval of a requisition, the purchasing communication (purchase orders sent to vendors), receiving, and the payment (settlement) for goods and services, typically through an invoice. "Procure-to-pay" literally defines the different procurement processes an employee takes to acquire goods and/or services.
What is procurement software?
Procurement Software, also known as eProcurement Software, is typically a web-based application that allows companies to efficiently manage their direct and indirect spend. Procurement Software allows companies to maximize the savings from the vendor contracts that they have negotiated.
Is procure-to-pay the same as accounts payable?
Accounts payable is one component of the overall procure-to-pay (P2P) process, focused on the receiving of invoices and arrangement of payment to the vendor. P2P includes the initial user requisition, managerial approval, and creation of the purchase order, as well. The accounts payable process is usually the last step of P2P, and often the most manual, requiring the printing, signing, and mailing of payments to suppliers.
How does procure-to-pay work?
The procure-to-pay process involves five key steps to purchase a good or service.
- First the employee selects the good or service and creates an initial requisition, typically from an approved vendor.
- That requisition is then sent to the appropriate managers for review and approval of the requisition.
- Once the requisition has been approved, a purchase order is created and sent to the corresponding vendor (supplier).
- The supplier will ship the item to the user and also send an invoice for the amount that was shipped. Either the initial requisitioner or another approved employee will receive the items, and
- Finally, the Accounts Payable team will match the vendor invoice to the receipt and the original purchase order. If all three match together, the invoice will be paid.
For enterprise organizations with a large number of users making purchases from a large number of vendors, it is highly recommended that a procure-to-pay software solution, like BuyerQuest, be utilized to ensure that the procurement process can be executed efficiently with repeatability and auditability.
What is the difference between source to pay and procure-to-pay?
A procure-to-pay software solution manages the procurement process from requisition creation through invoice settlement. A source to pay solution includes the capability to formally engage new vendors, generally through an RFP / RFQ process. Often this will include negotiating a contract. It had been previously thought that a single solution to manage the source to pay process was optimal. Many companies are now choosing a best-in-class approach with separate technologies for sourcing and procurement, reducing software vendor related risk.
How does BuyerQuest manage procurement?
BuyerQuest delivers a comprehensive procure-to-pay solution that takes the best of business-to-consumer buying without losing the control and audit capabilities needed in business-to-business purchasing. BuyerQuest allows casual users to easily make on-contract purchases of products and services from approved vendors, with clear approval workflows and seamless communication to those vendors. BuyerQuest streamlines the payment process, eliminating cumbersome, manual steps.
What is a Marketplace?
A marketplace is a single, online location where multiple vendors supply their catalogs for prospective buyers. In the business-to-business environment, this catalog is specifically for contractually approved products. A marketplace benefits businesses as it offers a single location for any employee that needs to make a purchase.
Why use a Marketplace with an ERP?
ERP systems offer broad value to organizations across disciplines including human resources, accounting, supply chain, manufacturing, etc. However, to the casual user, the ERP interface can be complex and time-consuming to use. These users often find it easier to buy via other channels versus using the ERP, driving up off-contract spend. Adding a user-friendly marketplace integrated to the ERP solves this problem. Casual users can quickly find what they need, add it to a shopping cart which automatically creates the requisition and drives the approval process.
Why use a Marketplace with an MRP or Management System?
As with ERP systems, an MRP often requires detailed training to become an expert user. Technicians who only visit the MRP when they need to order a repair part struggle navigating the complex purchasing system. When integrated to the MRP, a Marketplace makes it quick and easy to order the right part.
What is the difference between B2C and B2B purchasing?
Business to consumer (B2C) and Business to business (B2B) purchasing generally differ in the level of controls associated with the buying process. A B2C purchasing process is designed to be easy for a casual user to visit a site, find a product, and buy that product. A B2C website will likely include features like most popular products or “users ultimately bought” products that attempt to drive the user in a certain direction. The most striking difference is that a B2C website requires no training to use.
By contrast, a B2B purchasing process requires more control. The procurement organization works hard to negotiate with vendors for products at the best possible price. Users need to see those products to ensure purchases are made on contract and that the company is realizing their negotiated savings. Unfortunately, most B2B purchasing technology is built for control, making buying complex for the casual user.
BuyerQuest’s procure-to-pay technology is the best of both worlds. With all the controls of the B2B purchasing process, and the user-friendly interface of a B2C website, BuyerQuest helps improve user adoption and increase on-contract spending.
What is AP Automation?
Accounts payable automation, or AP automation, refers to the process of eliminating the many manual steps associated with the payment process of procure-to-pay. AP automation includes digitizing invoices, online approvals and workflows, and electronic payment of suppliers. With these steps, the accounts payable process becomes more streamlined and the risk of error or fraud is minimized.
What does user adoption mean?
User adoption is the level of engagement of the community of buyers, in procurement and across the organization, with the purchasing technology. The BuyerQuest platform is built to drive high levels of user adoption.
How can higher user adoption impact purchasing metrics?
User adoption has a significant impact on purchasing metrics. Low user adoption to procurement technology means that purchasing is happening offline, and likely off-contract. This directly impacts the procurement organizations' ability to achieve their savings goals. This also impacts the ability for procurement to audit and report on purchasing, or to negotiate with suppliers.
Why is buying at work so much harder than buying at home?
This common question is asked by most casual users trying to navigate their company’s purchasing process to buy something they need to do their job. Purchasing systems have historically been built with the purchasing department in mind. Focused on control and auditability, these systems were intended for regular use by procurement professionals who were well-trained and understood the process. As purchasing moved out of the hands of the corporate buyer and into the users hands, the need for an easier way to buy became clear.
Buying at work should be just as easy as buying at home.
Don't just take our word for itMore Testimonials
Procurement for such a diversified company is a big challenge, but in the same way that it’s Disney’s mission to bring unparalleled user experience to our customers and guests, it’s the mission of P2P to bring an outstanding user experience to our end user customers….and BuyerQuest is helping us do that.