This blog first appeared on the Corcentric website
Companies that have automated a single step in their P2P process have realized the benefits of that move and are now looking to implement an all-encompassing, start-to-finish, procure-to-pay automated solution for even greater results.
Over the past two decades, it’s become increasingly obvious to the business world that increasing productivity and profitability means removing those issues that hamper progress and create barriers to success. Two of the biggest roadblocks for the finance division are paper documents (invoices, POs, ASNs) and manual processes. Automation has been the key to reducing and even eliminating these problems. But what’s kept companies from optimizing this push to automating processes has been the tendency of companies to take a piecemeal approach.
First, break down the silos
Many companies are still working in silos; procurement and accounts payable seem to reside in isolation when it comes to process communication. Within AP itself, only the front end may be automated or digitized, with invoices being submitted via .pdf, e-invoice, EDI/XML and other electronic formats. Others have automated the way invoices are processed once they’ve been received, instituting business rules and implementing solutions that streamline and speed up the approval process. Still others have moved to electronic payments to suppliers, eliminating the cost and time of paper checks.
There are platforms and solutions that address each of these steps in the procure-to-pay process separately. But companies that have automated a single step and have realized the benefits of that move now realize that implementing an all-encompassing, start-to-finish, procure-to-pay automated solution will offer even greater results. That’s why companies are now looking to providers who offer bundled solutions that cover the full range, from PO to payment. A 2016 Ardent Partners study notes that the top three goals for AP over the next 24 months are: automate more processes (55%); improve collaboration and process linkage with procurement (40%); and reduce operational costs (35%).1
Being able to manage working capital and cash flow is highly dependent on having all of the data and analytics necessary to make important decisions. A robust end-to-end solution will provide full visibility into invoice status, 24/7, to each stakeholder in the P2P process, from procurement to AP to finance to supplier. Knowing this will allow finance and AP to make strategic decisions regarding payment scheduling and give procurement the necessary data to engage in more productive negotiations.
The power of leveraging data
The Ardent Partners study cited earlier addresses the issues of data and intelligence, comparing companies that leverage data to those that do not. They found that leveraging data positively impacted a variety of issues2:
- Handling invoice exceptions – 71% for those who leverage data; 29% for those who do not
- Improving finance/procurement collaboration – 67% for those who leverage data; 33% for those that do not
- Forecasting, budgeting, and planning – 67% for those who leverage data; 33% for those that do not
- Developing better payment strategies – 57% for those who leverage data; 43% for those that do not.
There are many reasons to work with a provider that bundles all of the aspects of finance and some provide more capabilities and functionality than others. Streamlining and ensuring accuracy in the P2P continuum is expected; however, a growing number of companies are looking for providers that also offer alternative financing. This is a situation where the provider will directly pay the supplier on an agreed-upon date and then bill the customer separately. As the recognition of the benefits of bundling grow, we expect that other finance functions will become available as part of a platform.
See how our AmeriQuest Business Service offerings can optimize your P2P processes.
1Ardent Partners, ePayables 2016: Eyes on the Prize, pg. 12
2Ardent Partners, ePayables 2016: Eyes on the Prize, pg. 9