If you’ve come to the obvious conclusion that technology is a major pathway to your company’s growth, then you need to rethink the entire P2P relationship.
In an time where businesses depend on collaboration between many parties, both internal and external, there are still too many companies where each department jealously guards its individual proscribed functions in individual silos. A recently published paper, “Insight: Rethinking the P2P Relationship” by Procurement Leaders in association with Corcentric, the author illustrates how procurement and accounts payable silos can cause individuals to not look at the larger picture.
As companies’ financial officers are expected to have greater control and visibility into spend, it’s incumbent upon them to first gain control over their entire procure-to-pay process; to effectively streamline it so that every transaction is seamless, end to end. That means that procurement and accounts payable need to work together from the point of when a product or service is ordered all the way to the point that the invoice is paid. E-procurement and e-invoicing solutions have broken down the barriers that traditionally have made that pathway rocky…eliminating the inefficiencies, excess costs, and inevitable errors caused by manual and paper-based processes.
The benefits of e-procurement
Companies are often unaware of the detriment that can result from a lack of visibility. Timely accesses to accurate, comprehensive, and detailed spend data offers invaluable intelligence on spending patterns, pricing compliance, and performance ratings. However, when an e-procurement solution is implemented, all stakeholders have a real-time view of not only the transaction status but also contracted pricing and terms. Those stakeholders include procurement, accounts payable, treasury, and suppliers. This transparency drastically reduces the likelihood of invoice disputes which can be extremely time-consuming and costly, both in terms of employee time to resolve disputes and with the potential loss of early payment or other discounts as payment dates are missed. Along with the reduction in disputes comes an efficiency that can only be realized when these processes occur digitally. With an e-procurement solution that includes e-invoicing, invoices that match both the PO and receipt of delivery can be sent straight-through to a company’s ERP for payment, eliminating the AP “touches” necessary when working with paper documents and manual processing.
And therein lays the problem…
Relinquishing control is never easy.
As the Procurement Leaders white paper notes, “successful e-invoicing implementation requires an adjustment in the division of responsibilities between purchasing and finance.” But some CFOs and other finance executives are reluctant to relinquish the role they’ve traditionally had, especially in SME’s, to sign off on every invoice. As Tony Morris, a consultant quoted in the paper states, referring to finance professionals, “Their whole commercial life centers around invoices and the task of balancing spend against revenue, so letting go of the sign-off process is very difficult for them.” Yet the truth is e-invoicing and e-procurement actually give finance executives greater control and accuracy than they’ve ever had due to the full visibility it affords. That, in turn, allows finance to better manage cash flow and working capital. And that, ultimately, can lead to greater growth and revenue.
Get more information on how e-procurement and e-invoicing can help break down your company silos and create growth.