Procurement Glossary & Terminologies
What is Procure-to-pay (P2P)?
Procure-to-pay software handles all aspects of procurement, from purchase to vendor payments, by utilising a single centralised system rather than multiple independent solutions. This kind of software aids businesses in streamlining procurement activities and increasing productivity.
Process of Procure-To-Pay
Step 1: Identify the need for a product or service
Step 2: Management of requisitions A formal request is submitted and approved for the products or services.
Step 3: Purchase Order Issued Following the relevant management’s approval of the purchase request, the supplier is given purchase order.
Step 4: Creation of the necessary goods or services receipt after the supplier provides the required goods or services.
Step 5: The supplier’s invoice is submitted and processed into the processing system.
Step 6: Processing invoices The invoice is compared to the PO, the receiving documentation, or any exceptions are noted for further review. Without a corresponding PO, invoices are sent through the workflow for review and approval.
Step 7: Accounts Payable receives the approved invoices and updates the system after payment.
Benefits of Procure-to-Pay Automation
- Improve Procedures
By removing time-consuming and error-prone manual processes from procure-to-pay operations, P2P automation increases processing efficiencies and reduces costs. You can collect 100% of your financial data and obtain the highest levels of supply chain visibility when you fully automate your payables and procurement operations.
- Boost supplier relationships
You may communicate electronically and efficiently with your suppliers by using automation. You may share with all of your suppliers, from the biggest to the smallest, by utilizing various methods to interact with them and exchange information and documents. P2P automation also improves supplier relationships and collaboration by increasing on-time payment performance and giving suppliers real-time visibility into transaction status.
- Cut Back on Maverick’s Spending
The best method to guarantee adherence to purchase guidelines and agreed-upon terms are to offer end users an electronic procurement (e-procurement) solution that makes it simple to identify and order the products they require. This will allow users to adhere to procurement policies and prevent maverick spending. Users will embrace a solution at a 100% rate with an intuitive user interface, a solid underpinning data model, and direct purchasing.
- Boost awareness and authority
Cost reduction and spending management are strategically important goals for CFOs and CPOs while minimizing operational disruptions. P2P automation systems offer a comprehensive view of your suppliers and spending from a centralized location for better strategic decision-making. You will be better positioned to control expenditure, reduce risk, and manage the entire supply chain if you have access to data and visibility into your company’s spending.
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