Leveraging Procure-to-Pay Technology to Optimize Resources
Too many businesses struggle with disconnects between procurement and accounts payable functions within their organization. When someone in procurement places an order or an employee makes a maverick purchase, your finance or accounts payable (AP) team might not know about this spend until they receive an invoice, which can lead to issues such as:
- Going over budget: If finance and AP teams don’t know about purchases right away, they might not be able to implement purchasing controls to freeze or slow spending as you approach your budget limits. Instead, they might find out weeks later that procurement teams or rogue employees incurred excessive costs by procuring unwanted products or services.
- Delayed payments: Disconnect between purchasers and finance/AP teams can cause invoices to not get timely approval for payment. That means finance/AP employees might have to scramble to reconcile the invoice and arrange payment, and if the payments end up arriving late, that could lead to additional fees and/or sour relationships with vendors.
- Unfavorable payment terms: If finance and AP teams aren’t in the loop right from the beginning, then purchases might include less favorable payment terms. It may be your policy to pay on 60-day term, or seek discounts for early payments or have a preferred method of payment, all of which may have been ignored when engaging with a supplier for a purchase transaction.
- Increased risk: When employees make purchases without having the appropriate team members properly vet a supplier, you run the risk of engaging with a rouge supplier. Such a supplier may never deliver the products, or you may have to compromise on quality or service. If you engage a supplier for service that does not have adequate insurance coverage, that can also result in unexpected liabilities for your company
How Procure-to-Pay Technology Helps
To avoid these disconnects between departments, businesses can leverage procure-to-pay technology, where this whole process can be integrated into a single system. For example, using a procure-to-pay e-procurement platform, an employee could source bids for cleaning services, hire a vendor, receive invoices for these services and get the invoice processed for payment through the same system.
Keeping the whole procure-to-pay process within one integrated system can help ensure that procurement and finance/AP teams can have visibility into both purchasing and payments, and you can set up a procure-to-pay system so that you only purchase from vendors with agreeable payment terms.
For example, with GoProcure, you can easily enforce your purchasing policies so that you use properly vetted suppliers to mitigate risk. All purchases made through GoProcure must always be approved by managers, have associated purchase orders and have matching invoices generated upon completion of the purchase. That also means your AP team is never waiting on employees to send them the invoice. Instead, they receive a validated invoice for pre-approved purchases before the payments are due.
Even better, GoProcure can consolidate all spend into one invoice, where you just pay GoProcure as your master vendor, and we then distribute payments accordingly. So as long as you’re comfortable with GoProcure’s purchasing and payment terms, you don’t have to worry about dealing with multiple vendors with varying and confusing payment terms.
Get More Out of Your AP Team with Procure-to-Pay Technology
Since procure-to-pay technology streamlines payment processes and can automate invoice management, your AP team can spend less time handling manual payments and chasing down invoices and instead use their time in a way that adds more value to your business.
For example, AP professionals can focus on areas like spend analysis to find cost savings and improved efficiencies, such as by identifying new opportunities for sourcing, as well as bulk ordering to receive volume discounts. Plus, by having less need for manual invoice management, your organization can invest in hiring more strategic finance talent, such as those who can get involved with market analysis, rather than directing those resources toward clerical work.
So instead of getting bogged down with manual invoice management and disorganized payment processes, consider how streamlining and automating these processes can help you get more out of your finance and AP teams.
Request a free consultation with our product experts today to learn more about how leveraging procure-to-pay technology can help maximize your resources.