The last decade has been characterized by rampant technological advancements and widespread digitization, which have significantly changed the way companies operate. The advent of the COVID-19 pandemic, in this scenario, only worked to accelerate the transition to virtual mediums.
Consequently, technology has become an integral and indispensable part of the functioning of a modern-day organization. Technology now sits at the core of all innovation and growth in most industries because of the several benefits that it brings to organizations in terms of accuracy, cost savings, and operational efficiency.
Given the rapid adoption of technology by the rest of the world, procurement and supply chain management, too, have embraced technology. The last few years have served as ample evidence of the certainty that technology is, in fact, the way forward for the end-to-end processes of the supply chain and international-grade procurement.
Amidst the several automation and technology-based initiatives undertaken by the industry, one that stands apart because of its extreme usefulness is the adoption of the procure-to-pay solution.
A comprehensive overview of the same is provided as follows-
Procure to pay: Meaning and benefits
The process of procurement is lengthy and complex. It involves a series of steps that need to be implemented in a streamlined and accurate manner each time. The introduction of the procure-to-pay function here will essentially work to link the systems of purchasing and accounts payable and, in this process, completely automate both of these operations. Automating these tedious tasks helps to radically decrease the time spent in manual processing. It also enables the admin to exercise greater control over the operations and gain better visibility.
Procure-to-pay has proved to be a sweeping addition to the supply chain management arena. It has proven to be an extremely beneficial introduction as it substantially enhances the quality and efficiency of the intricate processes, all while cutting down the costs.
Additionally, the quickened pace and precision of technology further acts as an incentive for firms to adapt to this revolutionary method.
How procure-to-pay works
The procure to pay is a comprehensive function that has an array of methods under it such as PO management, delivery management, invoice processing, business approvals, and analysis of insights. The way procure to pay works in different aspects of commerce are explained briefly below-
Better and quick decisions through PO management: Procure to pay essentially involves reducing monetary and time-based costs of operations by automating the processes of obtaining requisitions and NFA approvals. It also infuses technology into tracking POs, vendor acceptance, and amendment of workflows, and thereby, makes these functions centralized and streamlined. By allowing central control and access to all information, PO management facilitates quick and accurate decision-making, minimizes errors, and improves inventory management.
Improved delivery management: The procure-to-pay function also works towards improving delivery management. Starting from dispatch management and shipment notes to monitoring, tracking, and notifying the shipment’s progress, all processes become tech-based and thus efficient and quick. It also makes the functions of task allocation and delivery scheduling easier through the use of technology.
Smart business approvals: Procure to pay makes business approvals flexible and hassle-free by providing single or multi-step solutions online. All reviews, tax validations, and confirmations can be done conveniently and accurately online through this function, which makes the approval-obtaining process seamless and relaxed.
Straight through invoice processing: The heavy-duty feature of procure-to-pay completely automates the invoice processing function and does away with the need for any manual work. This not only quickens the entire process but, also makes it more precise and error-free. All validation and verifications, exception handling, and debit note & credit note generation are curated by technology-based programs and are thus, conducted in a streamlined manner.
Actionable analytics: Automation through procure-to-pay provides the customer access to a centralized, user-friendly dashboard that enables them to track invoice processing, cost savings, and other significant business metrics. It also supplies workable insights for shared service centers and generates operational reports on demand.
Technology is at the forefront of all kinds of innovation in the present-day owing to several factors such as rapid advancements, increasing globalization, and the pandemic. In this scenario, organizations are making widespread efforts to include technology in as many of their functions as possible to cope with the changing industrial norms. The procure-to-pay function that seeks to automate several commercial processes and make them efficient and cost-effective is a progressively opted choice by conglomerates in the present day. The scope of this article provided an overview of what this function is all about.
The above article is authored by Chandresh Sharma – CEO, Techpanion