The procure-to-pay (P2P) process has a direct impact on revenue and operations. That’s why it’s crucial for businesses to optimize and automate their procurement workflows. By reducing errors, adding visibility, and closing invoices more quickly, businesses are able to save time, money, and effort that otherwise might be wasted. That’s what P2P automation is all about.
Every company has unique P2P processes and guidelines, but the primary procure-to-pay methodology remains consistent. This includes generating and submitting purchase orders (POs), reconciling and processing invoices, and submitting payment for purchased goods or services.
This guide will show you everything you need to know about P2P automation and how it can lead to benefits like more efficient workflows, increased productivity, reduced human errors, and cost savings for the procurement team and overall business.
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What is procure-to-pay (P2P) automation?
Procure-to-pay automation refers to the adoption of software solutions to best integrate the purchasing and accounts payable processes. This eliminates repetitive manual tasks in your organization’s P2P process and increases process efficiency and saves time and money.
Examples of task automation in the P2P process include generating purchase orders, capturing invoices, data entry, updating statuses, and keeping information consistent across multiple systems in the procurement tech stack.
This automation can streamline departmental collaboration, reduce communication mishaps between employees, and make the entire process from purchase order to final invoice payments a breeze. P2P automation also helps teams get more from their existing apps and systems, a benefit known as stack extensibility.
By reducing the number of repetitive tasks accomplished daily, you’ll immediately give your employees more time to focus on tasks and activities that drive revenue and growth. That means less time spent on redundant tasks, and more time spent on problem solving, management, and being proactive.
In the following few sections, we’re going to discuss the benefits of procure-to-pay automation, the types of processes that can be automated, and then show you how your business can begin implementing P2P automation.
Procure-to-pay automation benefits
As technology becomes more accessible, businesses are able to pursue P2P automation opportunities that result in cost savings and greater efficiency. But there are other benefits of procure-to-pay automation as well.
Automating your procure-to-pay process and workflows will likely translate to gains in productivity across the board. The time spent manually sending out purchase orders or reconciling invoices can now be used to work on what your company requires and demands to grow and thrive in the marketplace.
Consider automating your P2P processes as soon as possible, if for no other reason than to increase employee productivity and give your teams a direct, crystal clear goal to work towards.
Automation helps teams avoid errors by reducing the repetitive auto-pilot work that can lead to them and by enforcing rules and conditionals that create more consistent and accurate data. Automation features such as forms can prevent missing or complete information, while the structured processes that result from automation reduce the variation that’s often the source of errors.
The potential cost savings provided by procure-to-pay automation are significant. When manual work is eliminated, teams expend fewer resources on repetitive tasks. This means they have more time for value-creating activities like searching for discounts, building relationships with vendors, and looking for opportunities to reduce spending.
P2P automation also results in less waste. Fewer errors and manual tasks means less rework and duplication. For example, procurement automation can generate documents, transfer data between systems and processes, and automatically route approvals to the appropriate person.
The approvals process can quickly become a tangled mess of communication mishaps, follow-ups, and a timeframe stretched over multiple weeks. Everyone is busy, which means getting someone to make time to review or approve a segment of the procure-to-pay process can be challenging in a fast-paced environment.
With P2P automation, you can automate the approvals process and remove all of the manual communication and follow-ups required to get somebody’s signature. Rather than chasing down approvers and manually running through the verification process, a P2P software solution will immediately notify the appropriate individuals and give them a deadline to complete the required steps.
Furthermore, with an automated approvals process, the purchase requisition will automatically advance to the next process step after the previous one completes, removing the manual effort of changing the current step in your P2P software.
Better relationships with suppliers
Delayed or missed payments can break down relationships with suppliers and vendors, especially if they are a recurring theme. By automating the P2P process, your company will be immediately positioned to consistently deliver purchase orders, invoices, or follow-up communications on time.
For example, if one of your teammates forgets to send out a document, the automatic P2P system can either inform the supplier that it will be on its way in a matter of hours or send out a default copy that you can amend later that day.
The fact is that your suppliers and vendors will greatly appreciate having everything delivered to them on time, and P2P automation can significantly improve your consistency and communication with your suppliers.
What procure-to-pay processes can be automated?
Now that we’ve discussed the power of procure-to-pay automation and the benefits of a successfully automated P2P workflow, let’s explore the processes that are a perfect candidate for automation.
A streamlined and accurate procure-to-pay process begins long before purchases are approved and sent to suppliers and vendors. It begins at the very start: purchase requisitions.
By standardizing and automating the way purchase requisitions or “purchase requests” are submitted, you can save time for yourself and for requesters by eliminating rework, centralizing information, identifying approvers early on, and preventing invisible or redundant spending.
Creating purchase orders that contain all of the quantities and specifications you require can be a long and tedious process if it’s not automated.
Your company can level up how you create purchase orders through P2P automation and significantly improve the most common workflow of using your enterprise resource planning (ERP) software.
With P2P automation, automatically generate and share purchase orders from the information included in the approved purchase requisitions.
Approving invoices can take significantly longer than anticipated, especially for teams managing a large volume of orders. By automating your P2P approvals process, you’ll be able to get everyone on the same page and receive approvals quicker than you ever thought possible.
Just like with invoice approvals, contract approvals and management is made much easier with an automated P2P process. You can automatically follow-up on approvals, automatically send approval requests, and automatically push your P2P sequence to the next step without manual effort required.
What to look for in procure-to-pay automation software?
When looking for procure-to-pay automation software for your business, focus on solutions that can help your procurement and finance teams scale processes and increase their efficiency. Look for software options that include features such as:
- Visual user interface
- Workflow templates
- Customizable forms
- Rules and conditionals
- Reports and dashboards
Low-code automation software is ideal for procurement teams. The low-code framework allows your procurement team to build and automate workflows using a visual interface. This speeds up time to value and helps the IT team conserve developer resources. That’s because low-code automation gives the procurement team an IT-sanctioned toolbox they can use to optimize workflows quickly and easily.
Why Pipefy is the best choice for automating your procure-to-pay process
Pipefy is a low-code business process automation solution that can help your organization automate your end-to-end P2P process and significantly increase your efficiency, productivity, and output.
With Pipefy, your team can:
- Communicate more efficiently with stakeholders, vendors, and clients.
- Streamline your P2P processes through automation.
- Get accurate data to measure, control, and improve your numbers.
- Avoid errors in your processes.
- Reduce the possibility of financial losses or missed or delayed payments.
Automate and design business workflows for finance and procurement teams in days or weeks rather than months and tailor your workflows to your needs without having to write a single line of code.