Communities of all shapes and sizes exist throughout society. Neighborhoods, families, organizations, towns, all of these are just a few examples of communities varying in size and function. Businesses and organizations are communities as well. In nature, these various communities that interact and function separately, but cohesively are called ecosystems.
Ecosystems, by definition, are self-contained. In other words, a single change to one element of the ecosystem can have a significant impact throughout the entire ecosystem. In the same vein, implementing a P2P cycle will significantly impact your business.
P2P is short for procure-to-pay. In other words, this is a system that manages the entire procurement process and integrates all the related payment processes and functions as well. Bringing additional functionality into a single system is a major trend in many industries right now.
The trend is known as centralization, which offers a variety of benefits to businesses that need to operate in a cohesive fashion. This is specifically appealing to multifaceted companies or businesses that have a lot of collaboration between departments. One of the main benefits companies who centralize experience is more wide-spread access to their data.
In other words, more employees throughout the organization have more access to better data that will allow them to make informed, data-driven decisions in real-time. This is true in the case for procurement professionals who make use of procure-to-pay software.
The P2P Cycle
The P2P cycle begins with departmental request for purchase order, or purchase order requisition. This is the phase in which any internal department recognizes a need for supplies or services and precedes the actual purchase order.
The purchase order is then submitted, and a higher-level authority in the organization eventually approves a batch of the purchase orders. Those are then dispersed and synchronized with the company’s ongoing procurement activities to maximize savings and minimize costs.
Sophisticated procurement software that provides management over the entire P2P cycle manages everything from the purchase orders to reverse-auctions, and even handles many of the accounting and finance activities related to procurement.
The procure-to-pay solution offered by ProcurePort, for instance, manages everything finance related even inventory related activities. Having a strong procure-to-pay process can completely revamp your business model and bring your business to the next level.
Benefits of the P2P Cycle
Investing in software for managing the P2P process is a step toward centralization. Ultimately, that yields a multitude of benefits for the company that prioritizes optimizing the internal P2P cycle. One of the main benefits of P2P software is company-wide higher rates of efficiency.
Because the procurement process becomes more streamlined for the entire vertical of the company, everyone, even c-suite professionals, get hours back into their weekly schedules. These hours can then be reallocated to more impactful and significant activities that are vital to the company.
In addition to a more streamlined process and the boost in efficiency, companies also experience lower costs on the procurement process in general. Not only that, but organizations experience higher savings on the individual transactions that the procurement department oversees on a daily and weekly basis.
All-in-all, investing in an effective procure-to-pay system will result in higher operational efficiency, higher savings, and lower costs.
Procurement is a department composed of many functions and layers. Bringing those various aspects into a single system allows companies more control over the procurement cycle from start to finish.
With data regarding inventory trends, managers are more informed and can make better decisions regarding their inventory management cycle. This ensures that the company has the right stock proportions for all their best-sellers, mid-market products/services, and even rare-purchase items. This information is much more accessible through a comprehensive P2P software.
On top of that, with payroll, accounting, and finance activities all wrapped up into the same system – procurement professionals can focus their time where it matters most within the business. The best procurement teams in the industry rely on the power, data, and speed of comprehensive procurement cycle systems and software.
If you’re building out your procurement strategy or looking for a procurement solution, get in touch with a procurement professional at ProcurePort who will help you devise a specific procurement strategy for your business. Our automated procurement software will assist you in driving digital transformation throughout your organization.