Jeremy Ferrer
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Optimize your C-Class purchases and boost your results.
January
The procure-to-pay or the purchasing process is among the tools for digitizing processes that every company must integrate.
It is a fact, companies can no longer do without digitalization and the digitization of processes. At a time when we only talk about digital technology, they must follow the “flow” and innovate on all points. But what do these terms mean? What is the procure-to-pay system? What are its advantages and how do you set it up?
The purchasing process in a company is sometimes a tedious and time-consuming operation. Digitizing it is a way to better control it while maintaining a good relationship with suppliers over the long term. Procure-to-pay, also called Purchase to Pay or p2p, refers to the entire purchasing process, from the moment the company begins to express its purchasing needs to the final payment.
This digitization process obviously uses tools, especially software that does everything in the place of the managers who are responsible for fulfilling this function within the company.
La p2p platform has the function of automating this process so that it does not take too long and to make it easier to control it. This ERP solution integrates various functionalities allowing the company to digitize functions such as entering and reading invoices, accounting...
Investing in P2P only brings benefits to your business. There are numerous advantages to its use:
The solution Procure to Pay is beneficial for the profitability and productivity of your business. It helps to reduce processing times as well as the risks incurred during the purchasing process. As it is a software that does everything, it allows you to reduce your expenses in terms of labor since the whole process will be automated.
Tracking orders and invoices becomes easier with the Purchase to Pay. The tool allows all stakeholders involved in purchasing in the company to be connected and to be able to follow the evolution of orders in real time.
In addition, the P2P solution allows you to better manage your product catalog in order to better manage expenses in defined purchases. The tool centralizes your catalogs and even integrates a search engine to facilitate the search for suppliers. Expenditure outside the framework cannot take place as your colleagues can only make authorized orders.
So, the Procurement process allows you to save both time and money.
La P2P solution gives you better visibility into your expenses. This results in better transparency in the entire process, but especially in the orders sent and received. Budget monitoring at the level of your company will be better controlled. You will have a global view of the difference between what you actually bought and what is in the accounting.
Also as part of the expenses, the P2P or Procure to Pay gives you the option to reduce these because you can see them in the tool. This allows you to better identify if there are unnecessary expenses and to control them. Thus, you can better control expenses, have better visibility of purchases from the moment the order is sent to the processing of the payment from the service provider.
Such as the automation of the various purchasing processes, through the system Procure to Pay, allows you to optimize the time you have, it gives your team the opportunity to focus on most of its tasks, especially on tasks that are more strategic than operational. This can only be beneficial for your business. When your teams are freed from repetitive and tedious administrative tasks, they will be more productive and will surely optimize their skills.
Automation through the Procure to Pay is also beneficial for the quality of the relationship you have with your supplier. As the tool allows you to track your exchanges and the orders you have made, you can better follow your purchasing process and can have better control over your communication with the supplier. When the latter trusts you, you have the opportunity to negotiate better with him. This will be an advantage for you compared to the price you may have.
When the supplier cycle is automated, there is no doubt that the process is accelerated. You save time and the Procure to pay Optimize the process flow.
In addition, this solution allows you to better manage your suppliers. Automating your purchasing catalogs simplifies your task when it comes to sourcing suppliers and products. In the event that the products you want to order are not yet listed in the tool's database, you will still have to search and find suppliers.
The P2P allows you to compare the prices of each type of product you want to buy so you can get the best deals.
Data processing gives any business a run for their money. However, by using an ERP tool such as the P2P, you combine all the data from the entire purchasing process in order to better analyze and process them. It is the platform that brings together the data. You will always have access to them when you need them. Some platforms even provide functions that allow regular reporting of data to better exploit it.
In addition, most of ERP offer excellent ergonomics for a better user experience. Easy to use, the platform can be used in an optimized way.
Purchasing processes are the set of many small tasks such as manual data entry, data classification or printing... Then, once the invoices have been collected and processed, they must be signed and the validation circuit is another challenge to take up.
By automating these processes, you can simply save time so that you can later use it to improve your business strategies.
In addition, the digitalization of processes Purchase orders also allow you to process exceptional invoices more quickly, because yes there are always some. Since all the data is clearly visible, if there are exceptional documents, it is possible to quickly locate and process them.
The idea is in reality not to eradicate human functions in the company, but rather to help each person who works there to better optimize their work through tools such as ERPs. By using this type of platform, the risk of errors is zero since everything is automated. Also, if the catalog is poorly managed, users will have no choice but to opt for the first item that appears.
In addition, the risks of manual entry errors or the loss of documents will be avoided thanks to automation. As a result, company information and data in relation to the purchasing process are centralized and better preserved. The risks of double payments will also be eradicated.
Payment processes are also centralized in P2P. In fact, these are treated as a fully-fledged operation in the software. Payments are managed and made electronically, which does not allow errors. Payment terms are optimized and this improves the relationship you have with your supplier. When everything is done on time, flows can be better managed.
In a company, whether internally or externally, as in the context of relationships with suppliers, there will always be disputes. Managing them is difficult if you don't have quick access to information about the sources of conflicts. That's why the digitalization of processes Through the Procure to Pay contributes to improving the handling of disputes.
Tax dematerialization is planned between 2024 and 2026. By adopting now the digitalization of your processes, you are preparing yourself in the best possible way for this dematerialization that will soon take place.
In order to better use a P2P software, you should know that the process is divided into several steps that we will develop below.
In this stage, the company first expresses a need of any kind. It must be provided within a specific time frame. This must be authorized and approved by the appropriate officials before following the Process of Procure to Pay. Once this is done, the request is sent to the purchasing department to be processed. It is therefore at the level of this department that the request is launched.
When studying these needs, the company's purchasing department must take into account the available budget. Afterwards, he has to find a supplier. If the company has a P2P platform, product and supplier catalogs should already be listed on it in order to facilitate research. If the tool lists numerous suppliers, it is possible to compare the prices as well as the quality of the products it offers. This allows you to benefit from the best offers and to negotiate with the supplier if necessary. Afterwards, an order form must be sent to the Purchasing Department.
The order form is sent to the company's Purchasing Department. Generally, it is this department that takes care of everything related to the company's purchases. It must also make the decision on the final choice of the supplier. Then, he creates an order form or the Purchase Order or PO in the tool and then sends it for validation. The order form is finally sent to the supplier for validation. This stage is also better known under the name of validation circuit.
Once all these steps have been completed, the supplier must prepare the order and deliver it to the company. This creates a receipt note. All of this is scanned into the tool's interface. Even better, the advantage of P2P is that management is personalized since each supplier has a personal space where they can manage the document flows that they must process. The receipt note certifies that the delivery is in accordance with what was ordered.
So far, the entire process has been managed by the Purchasing Department. From this stage, it is the accounting department that will take care of the steps that will follow. But the handover is not complicated thanks to the P2P platform. Thus, the supplier sends the invoices via the tool for them to be processed by the company.
Received invoices are automatically compared to the order form, always on the p2p platform. They must also be compared with the goods received. It is the reconciliation of 2 or 3 factors that is an essential step in the buying process.
Once the invoices are validated through the reconciliation process, they are sent to the department that takes care of the payment, always via the automated P2P system. Sometimes some invoices require additional signatures, in this case, the platform will automatically transmit the invoices to the people concerned before sending them to the service that takes care of the payment. Thanks to all this process, which is entirely dematerialized and automated, it is almost impossible to have double invoices for example, emails waiting for validation or even documents that are lost.
All these terms relate to the management of the purchasing process and the payment process within a company. This can extend to product research, procurement or even invoice management. The word Purchase to Pay is however used at the same level Procure to pay which encompasses the same processes.
They should not be confused with the term Source to Pay or S2P, which relates to sourcing. This means that the s2p integrates the sourcing process into the stages. This provides the company with all the resources necessary for the purchase to be successful. For example, the company BME (or Buy Made Easy) offers a source-to-pay solution called Source Forcing allowing you to automate your processes of eSourcing before placing orders.
P2P can be a complex solution to implement, especially if your business has not yet integrated digitization or digitalization in its processes. Here are some tips for successfully implementing P2P.
On the market, you can find numerous solutions of Procure to pay. Only a few can really help you reach your goals. Go for the leading solutions if you don't want to waste time choosing the right solution.
It is never easy to integrate a new tool into a department in a company. If you don't have a specialist at your side to guide you, it can quickly turn into a nightmare. It is advisable to use a procure-to-pay expert to support the entire service, provide training or even take care of the technical aspects of the interface for optimized use. Sometimes companies that offer these types of solutions accompany you until installation. Despite this, it is always essential to have a technician by your side who you can turn to if something is wrong.
Integrating change within a team is not easy. This type of solution could be difficult to handle, especially at the beginning. It is therefore important to inform your team well about the deployment of the project, but also to train them so that each member can quickly adapt to the interface.
It is not only your team that will integrate the project, the suppliers will also be part of the adventure. The best thing to do to convince them to join it is to educate them about digitalization and to highlight all the benefits they can have by adopting the system with you.
On the other hand, it is also advisable to clean your supplier data beforehand before listing them in the procure-to-pay system. You will see, it will be easier afterwards to find the right one for a given product.
As the head of the purchasing department or the logistics department, you may have made the decision to implement a P2P system in the company. Your motivations are probably well-founded and it is the best solution to optimize your purchasing and procurement processes, but also the management of invoices. However, know that you are not the only one who must work on this project and your decision will certainly impact the overall results of the company. Management support before, during, and after setting up the system is important if you want to be successful. So don't overlook this step, because nothing can make you fail. Set goals, plan each step you need to take, inform management of the actions you are going to take, and believe in your procure to pay project.
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