Use procure-to-pay process automation to scale your operations

Procurement can be a pain. Errors, bloated email inboxes and time-consuming manual processes. But there’s an easier way: Fast-track growth with automation.

Small mistakes are an accepted part of day-to-day business. Everyone’s human, right? But as your company grows, one or two mistakes per employee can stack up and cause considerable bottlenecks in the procurement process that result in project delays and disappointed customers. 

Have you noticed more issues than rewards with your procurement recently? Here are some prime indicators that it’s time to move on from manual:

• A high volume of Shadow IT and Maverick spend
• Delays and approval bottlenecks
• AP inefficiencies and inaccuracies
• Duplicate or overpaid invoices
• Blown budgets
• Retroactive procedures

Employees drive your company’s development and don’t have time for lengthy SaaS acquisition procedures. Yet times of growth are when smooth processes and quick actions are needed the most.

Procure-to-pay technology is your ticket out of this time paradox. When we explore the procure-to-pay process, we can see just how many areas technology can benefit. 

What is the procure-to-pay process?

Procurement software of the past handled vendor and purchase information storage but stopped short of efficient processing. So, how is procure-to-pay different?

Rather than a singular focus, the p2p process covers the entire cycle of activities involved in acquiring SaaS. From identifying a need to purchase orders, invoice matching and contract management, automation plays a significant role in a smooth procure-to-pay system. 

P2p software solutions are a tool of choice for successful, scaling businesses that recognize that their time and effort are spent better on innovation than spreadsheets. 

Beyond operational streamlining, p2p tools save budget in areas susceptible to cost waste. In fact, organizations see up to 60% improvement in spend visibility and spend management when using a P2P platform. 

This is because procurement automation can handle both tactical day-to-day actions and strategic planning. It doesn’t just tick off one element of procurement; it optimizes the short and long-term practices to keep your financial health intact. 

But with so many small steps in the procure-to-pay cycle, how do you know which ones your p2p software should automate? 

Seven processes to automate in your procure-to-pay cycle 

The best procurement tools for SMBs use procure-to-pay automation and prioritize the following areas for maximum cost-efficiency, productivity and business growth.

1. Purchase requisition (PR)

What’s the email title reference for purchase requests? And who do I need to copy in? 

These questions are just a brief glimpse into practical hold-ups from the very beginning of the procurement cycle. Referring to manual policies, preparing and sending emails with the necessary information and links is fiddly and time-consuming. 

Automation of PRs streamlines this process and allows employees to submit their requests digitally. 

Procure-to-pay software enables the quick generation and submission of purchase requests with standardized templates to keep procedures consistent across the company. 

PRs are automatically cross-checked with internal policies and regulations, meaning fewer bounce-backs. 

The hours saved on writing, checking and re-doing purchase requisitions can be invested back into profitable projects for the company. Your employees will thank you for removing their frustrations, too. 

2. Purchase approval

Approvals can feel like jumping through hoops in slow motion. Time ‘chasing up’ purchase requests is much better spent on maintaining and scaling the company.

Automation gives you back that time. Approvals are promptly routed to the appropriate approvers, often via useful integration with your communication software, such as Slack. This keeps things visible and achievable for everyone. 

Linear approval workflows deal with standard PRs, but automation has more potential. Highly rated procure-to-pay tools feature dynamic and conditional approval workflows that can be customized to reflect the needs of your company, reflecting budget and financial targets. 

For instance, a dynamic workflow will automatically reroute an approval request to a more senior manager if the pricing exceeds predefined limits. A conditional approval workflow can be returned automatically if certain parameters are absent. Any PRs that do not meet the business’s aims are swiftly returned before any cost is incurred. 

3. Vendor selection

It’s easy to get bogged down with vendor selection. You’ve got to research specific software features, unpick pricing plans, check company reputation, read reviews… It could go on for weeks. Now multiply that by at least three because your selection process wisely involves comparing at least a few suppliers. Impossible!

Enter P2P software. From the very beginning, it works with you. Your software houses your vendor database to allow for easy matching with your required solution. Your perfect vendor could be on your system already, and your procurement platform makes them visible.

If you want to dig deeper and compare smaller details between top suppliers, P2P tools can provide granular metrics on KPIs to help your decision-making. Analysis of metrics such as spend by supplier, compliance rate and invoice accuracy makes you confident in your choice. 

Real-time metrics also give you the leverage you need to secure the best prices in negotiations with vendors without the time-consuming hassle of spreadsheet collation. 

Want to save even more time and cost? The highest quality procure-to-pay tools offer strategic sourcing partners who are expertly placed with business intelligence to win up to 60% off your cloud bills. 

4. Purchase order (PO) creation

Time to get serious. A purchase order must be accurate. No one wants an audit flag to be raised due to a sloppy PO that is missing key information. So, how can inconsistencies be avoided?

Automation guarantees an organized and meticulous approach. POs can be generated based on approved requisitions in your procure-to-pay software and include up-to-date information pulled straight from your vendor inventory. 

Consistent POs across your company make all purchases relevant and value-rich. Your procure-to-pay software also integrates with accounting software to maintain cost efficiency. It’s another key feature that makes waste more visible and avoids future costly surprises.

Automated workflows can be set up to fast-track POs based on internal conditions such as supplier data and approvals having been met. When POs are sent, the software keeps track so that you don’t have to. The activity, date, time stamp and details are logged in an audit trail for easy access and visibility.

Alert automation notifies the relevant personnel when suppliers have accepted the PO, and the smooth process continues without the need for manual intervention.

5. Invoice approval

SaaS invoices are often a force of nature. Your bill may be pages long and contain small details that need to be cross-referenced. Once again, approvers are losing time and energy on a process that could be digitized. 

Automation plays a crucial role in processing invoices and freeing up personnel to focus on more strategic business objectives. Procure-to-pay systems automate data extraction, invoice matching and discrepancy identification. 

Because all information is centralized and your software links with your accounting tool, the risk of overpayment and duplicate invoices is removed. The most proficient P2P providers utilize three-way matching of invoices, which compares:

1. The description, quantity, cost, and terms of the company’s purchase order
2. The description and quantity of goods shown on the receipt
3. The description, quantity, cost, and terms on the vendor invoice

Streamlined workflows automate the invoice approval process after the matching process. Stakeholders receive instant alerts and can swiftly approve accurate invoices. No more delays!

6. Supplier payment

You’ve had such a steady procurement process up to this point, so it would be a shame if a delayed or inaccurate payment spoiled it. 

Procure-to-pay software integrates with your ERP or accounting system, meaning that you can both keep track of purchasing against budget and maintain accurate financial records for long-term cost awareness. 

After your initial purchase, you can set up automated payment schedules and use digital cards to make your payments more efficient and accurate. On-time payments keep your forecasting accurate and vendors happy. 

P2p tools also facilitate the auto-renewal of subscriptions. However, it is wise to act quickly on renewal reminders on your dashboard. You don’t want to miss out on important opportunities to re-negotiate your SaaS prices or secure deals. 

7. Contract management

Now your contract is in place, you might be tempted to leave it untouched. Managing contracts, storing details and conducting regular reviews can feel like a huge task, especially when you have hundreds of apps to process within the company. But, a neglected contract can hide some serious cost leakage over time. 

Procure-to-pay automation can take manual labor off your hands. You can set up regular reviewal reminders for each piece of software on your system so you stay in control of their return on investment and avoid unnecessary cost waste. 

When it’s time for a review, how do you know your SaaS is performing well? Your P2P platform holds the insight here, too. Important metrics such as cost avoidance and supplier availability or rating make sure your SaaS is consistently working for the benefit of your company.

Automating these seven stages in your procurement cycle leads to cost savings, improved vendor relationships, increased compliance and faster processing times. Let’s uncover which specific KPIs will reap the benefits. 

Where will you see the benefits of procure-to-pay in your business?

It’s no secret by now that procurement visibility is key to managing SaaS purchases. If you can see it, you can control it, and that’s made even easier with automation. 

Your P2P automation provides rigorous and timely insight into where value can be optimized. Which KPIs can you expect to improve as a result of your automated procure-to-pay journey? 

Spend under management

Now lengthy approval timelines have been banished, employees no longer feel the urge to solve problems on a whim. Shadow IT and maverick spending diminishes and your spending under management data shows a positive trend of sanctioned SaaS in your stack. 

Your fully transparent procurement software keeps you in control of purchasing and requests.

Average cost per invoice

Greater accuracy through automated invoice matching and integration with financing software means lower average costs. Overpayment or duplication can be easily avoided with technology. 

The savings you make can be added to the budgets that need it most within your organization or ringfenced for innovative development. 

Purchase price variance

When you’re not a repeat offender with late payments, suppliers see you as a partner. Healthy relationships pave the way for access to deals and discounts and make negotiating on price easier. 

Your purchase price variance will be greater as you secure more SaaS savings. The best procure-to-pay tools save companies over $100,000 through intelligent pricing insights and volume discounts. 

PO and invoice accuracy

P2P automation uses controls and audit trails that reduce the risk of invoice fraud and ensure transactions are secure and accurate. 

This not only saves hours that are better spent working towards your business goals but also avoids fines and error-fixing costs. 

Compliance rate

Your company can achieve a 92% or higher PO compliance rate through procurement automation, contributing to better spend control and overall cost efficiency. 

P2P software moves you from manually ‘fire-fighting’ problems after they arise to catching potential issues with automation before they have time to germinate. 

Real-time monitoring and audit trails keep you ahead of your spending, improve compliance and make your financial forecasting more robust.