Editor’s Note: With summer in full swing, many of the practitioners in the accounts payable world are taking vacations ahead of the crush of the fall months. In honor of that, the team here at Payables Place is continuing its “Summer Rewind” series with some of our favorite posts from roughly a year ago. Today, we are re-running our article on two approaches to building a connected procure-to-pay (P2P) process, which originally ran in February 2015.
The Accounts Payable Department Approach
For many enterprises, the accounts payable department can be characterized as paper-laden and inefficient. Any function that operates in an almost or fully manual manner can make a straightforward business case for investment and change. An accounts payable department seeking to improve its performance has several key areas upon which to focus: efficiency, effectiveness, and accuracy. Understanding the AP department’s main objectives and goals from process automation can help provide a better orientation for the other P2P stakeholders. The list of initial goals typically includes the following:
- Improve invoice processing efficiencies and customer service
- Gain better visibility into process, line item detail, and supplier performance
- Develop a more effective payment strategy
- Improve the ability to close the period’s books in an accurate and timely manner
- Gain better alignment with the CFO and the finance department
Beyond the automation of core AP processes, T&E expense management will continue to play an increasingly important role for Best-in-Class accounts payable departments.
The Procurement Department Approach
Over the last decade, procurement has undergone a broad, industry-wide transformation that was, at its core, a technology-enabled phenomenon. Though progress continues, much work remains for the typical procurement department. Understanding the procurement department’s main objectives and goals from process automation can help provide a better orientation for the other P2P stakeholders. The list of initial goals typically includes the following:
- Increase savings, spend under management, and overall influence
- Improve visibility and contract compliance rates
- Reduce supply risk and maverick spend
- Improve process efficiencies and department visibility within the enterprise
Procurement, like accounts payable, is a crucial link in the P2P value chain. As a result, starting the P2P project in procurement isn’t really that much of a stretch.
Final Thoughts
Crafting a cogent P2P workflow can be a critical differentiator between top performing organizations and the rest of the field. A coherent workflow also allows for the enterprise to garner cost savings through improved contract compliance, as well as have the ability to track and analyze specific performance metrics. Where the P2P project begins doesn’t matter – whether in AP or procurement – so long as the work gets done.
Check out these related articles:
The P2P Blueprint: Who Needs to Get Involved?
Driving Value Through a Connected P2P Process – Part I
