The results of Best-in-Class organizations show that an investment in Procure-to-Pay (P2P) can pay large dividends, while the relentless pressure on bottom-line performance makes a P2P investment all, but necessary, for most groups. Yet, the speed and level of returns from a P2P initiative can and do vary widely. Competing short-term initiatives from distinct organizations within the enterprise can result in parallel projects that have no contemplation of the others; while a fragmented technology landscape can often trap organizations that focus solely on short-term requirements, from ever realizing the far-greater, long-term value that a cohesive and comprehensive P2P program can deliver. There are numerous other obstacles and risks to achieving P2P excellence; but, with proper planning, most can be avoided or, at minimum, anticipated and minimized.
A P2P process that is well-aligned from an organizational standpoint and tightly-linked and automated from a process standpoint will present a series of opportunities that procurement and finance can jointly pursue to the benefit of the entire enterprise. Many of these opportunities are a by-product of having visibility into spend, invoices, and processes across the P2P spectrum. A whole host of abilities (and benefits) can arise from a cohesive and connected P2P process:
- Better identification of sourcing opportunities and thereby, increase savings
- Improved contract compliance and a reduction in maverick spend
- More spend under the management of procurement
- Greater automation and as result greater visibility and control across the three major AP phases (Receive, Process and Pay)
- Reduction of exceptions and errors and thereby significant improvement in processing efficiency and invoice cycle time
- Improvement in supplier relationships by being able to pay suppliers on time (or early) and more accurately, having fewer inquiries and improving response times.
- The ability to track supplier performance and thereby improve it
- The ability to measure and improve departmental performance and customer service
- The elevation of AP from a back-office function to a strategic component of the enterprises financial operations
- Optimization of working capital across the P2P process by developing proactive payment strategies and pursuing dynamic discounting opportunities
