Why To Automate Your Procure-To-Pay Process

Posted on May 28, 2012


With the economy the way it is, the last thing you want to hear is yet another business software company telling you how you can save money by investing in new technology

You’ve probably heard all about cloud based systems and how software as a service can save you money by offering your business systems on-demand. However, that’s probably a big change to how your company runs it’s IT department and will require a lot of thought and potentially investment. There must be smaller technology projects that will reduce process variability whilst at the same time cutting the labor intensive and expensive manual processes

Your procure-to-pay (P2P) cycle is one area where you can make quick wins by automating and with minimal expenditure. It’s possible you don’t want the expenditure of a fully automated procurement process but it’s important you don’t scrimp on P2P

Procure-To-Pay is just one of those things that is cost effective when automated, this means that there is a fast return on investment. Automating procure-to-pay will always help your company to cut out time consuming manual admin which is vitally important, especially in climate where every penny is scrutinized.

Automating P22 means that the impact on a business involved with the purchase process is lessened because the required goods and services can be delivered more quickly and therefore more cost effectively. If you take Gloucester City Council as an example, they have reduce the time involved with procuring an item by a staggering 75% – just think about what your organization could do with such time savings. Staff could be reassigned to more value adding tasks.

The automation of the P2P cycle also means spending becomes more disciplined and it cuts out unauthorized spending. It delivers an automated record or your orders, your approvals and the payment which ensures that the process is completely transparent. It allows potential fraud to be stamped out very quickly

Also, the digital capure of data leads to smarter decision making and further reduces expenditure. An astute amalgam of digital communication and automated payment and procurement processing can lead to a 75% reduction in the costs associated with requisition processing and an 80% reduction in central processing costs.

Cuts in expenditure can also be made by cutting down on the number of suppliers for each key product or service. This means there is greater efficiency of scale and you can take advantage of bulk buying and additional discounts. The automated P2P process means a company is more likely to distinguish good suppliers and make sure that all suppliers are approved by the organization.

Of course, another advantage in removing the human element is that people make mistakes, manual processes are subject to errors and also open to corruption. An automated system will mean that your procurement process is carefully managed and also that the risk of fraud associated with manual processes is reduced.

Automating the procurement process wail produce easy quick wins for a company. Choosing to replace people with an automated process is not an easy decision, however the business benefits and cost savings of an automated procure-to-pay process means that it’s worth the expenditure.

Jim writes about procurement software and other business related systems that increase business efficiency and lower expenditure.

Posted in: Business