Procure-to-Pay is the full cycle that a business goes through when they need to obtain goods or services from a supplier. The cycle describes what steps need to be taken to complete the procurement process and to finalize payment. On paper, it’s a simple process that can be followed systematically, but in a modern procure-to-pay process there is a lot going on at each step.
A general procure-to-pay process can be paper or more often a combination of digital forms and paper documents. This can become cumbersome to handle, with each step and different parts on paper or in digital form it’s difficult to collate everything into an easily digestible format.
Everyone in the industry is familiar with the major steps in this process. When undertaking procure-to-pay, how does SAP fit into all of this, and what is the procure-to-pay process in SAP?
Procure-to-Pay Process And SAP
The procure-to-pay process not only involves many steps but will involve many departments within even small to midsize companies. The administrative tasks are often where time is lost, having to handle paper counterparts and cross-reference against digital forms mounts up.
Introducing SAP and automating the process whilst also digitalizing everything improves the whole process. Eliminating the paperwork and automating the procure-to-pay process not only reduces the operational costs but greatly reduces the factor of human error in each step.
Sometimes management can think the purchasing process is effective and working as intended. While this might be true, companies should always assess what is procure-to-pay and its inner workings in their process to analyze each of the steps undertaken. There are obvious areas where upgraded technology implementations can make a sizable difference.
The Process With SAP
SAP brings immense versatility and powerful functionality to the whole procure-to-pay process. The process typically has few steps if you include primary sub-processes. This provides a descriptive overview, but is overly verbose and requires manual assessment at each step. When software is introduced, the process becomes more streamlined and certain processes blend into one.
1. Determination of Requirements
Identifying needs is the initial step. Once the requirements of the business are defined, the needs can then be determined by the procurement team. They can then produce high-level specifications for whatever goods or services are needed.
2. Requisitions And Approvals
Once requirements are realized, a purchase requisition can be produced. Through the use of intuitive software, a person entering information for a purchase request can enter the details for their goods or service required. Once this is in the procurement tool, they select everything and can choose a vendor from the database. This is all done automatically without even a single email sent.
3. Purchase Order Management
Software solutions can automatically create single or multiple purchase orders from the approved requisitions. This eliminates time wasted creating multiple documents and contacting every vendor to discover stock values.
Monitoring is also done at this stage automatically. The software monitoring the orders can check for fulfillment information, lack of stock, and all quantities or changes. This reduces the chances of a bottleneck and creates an effective order workflow.
4. Invoice and Receipts
A fully automated procure-to-pay process using ProcurePorts software solution streamlines every step. The whole process including invoices and receipts is all paperless, this is carefully curated into one document displayed on a specially designed user interface.
Invoices are all handled digitally and compared to the purchase order and receipt of the goods. Instead of the usual “3-way match” system which is prone to irregularities and errors, the software reduces it all into one digital document.
5. Accounts Payable
The final step is, of course, payments. Reduce headaches, accounting errors, and delays through the use of the software. Utilizing electronic payment processes, payment can be delivered faster with all details recorded accurately. This level of cash flow monitoring allows for easier data entry into the accounting systems and ensures all parties involved receive the necessary confirmation when the P2P cycle ends.
The Procure-to-Pay Process in SAP Benefits
The P2P SAP workflow does not alter the process as such. It segments the basic stages of the usual procure-to-pay model, and changes focus on the key areas where data communication and accumulation occur. This is how the ProcurePorts software solution creates a comprehensive and simple single form of data from the entire process, data is collated and displayed throughout each stage efficiently.
Some vendors worry about their relationships, and what is procure-to-pay’s impact when it’s all completed automatically. Combined with eAuctions, some vendors feel alienated and a detachment from their customers. When using software like ProcurePorts solution there is functionality to create a supplier catalog, this allows for easier management of your contracts and top suppliers.
This eliminates worries from either side and can create a mutually beneficial relationship, keeping prices competitive but retaining that relationship between both parties. The benefit here is that the catalog streamlines purchasing and payments in future processes even further.
Procure-to-Pay Automated Solution
The ProcurePort procure-to-pay Solution eliminates the “3-way match” combining requisition/PO, goods receipt, and invoices/payments into one document. This software working adjacently with SAP provides a single solution that automates the whole process encompassing every aspect.
ProcurePort procure-to-pay solution has a set of integrated modules to be used independently or the best option as a single source-to-pay suite. This enables your business to tailor fit the software to your needs and utilize it to its full potential. Connect with us and request a demo, let us demonstrate to you why our procurement solution is the best fit for your business.