As the distribution industry continues to wrestle with supply chain headaches, companies that embrace new ways of thinking about P2P automation can improve efficiency and grow their bottom line, said Cindy Dobson, P2P sales leader for Esker.
“No matter which end of the spectrum that your business is on, supply chain leaders are forced to take a fresh look at their business model to ensure that they can weather the next storm and come out on top. For many innovative leaders, this means new ways of thinking and capitalizing on digital transformation to realize real results on their balance sheet,” Dobson said during a recent MDM webcast.
Automating P2P practices can help companies in multiple ways:
- Hosted/external catalogs: Automated procurement provides a quick and efficient buying experience, where purchasers can access supplier punch-out catalogs in item list views that allow users to switch to products that are convenient to them. This accounts for easier and quicker item selection.
- Budget management: The process offers real-time budget balance availability, where budget information is automatically and regularly updated. Cost center owners are informed when they open the requisition whether or not the purchase fits in the available budget.
- Intuitive purchase order creation: The process converts a requisition into an order, picks items from a list and can clone a previously placed order.
- Intelligent approval workflows: Approvers are notified by email of purchase requisition sitting in their approval queue, so they don’t forget about it.
- PO-flip: An automated tool allows for speeding up invoice processing. Buyer/supplier benefits include reduced cycle time and workload, paperless processes and on-time payments.
“With procure-to pay-automation, we’re talking about all of the activities that go into requesting, receiving and paying for goods or services,” Dobson said.
Challenges with existing P2P processes
Lack of controls based on manual processes and duplicate or late payments have been a big concern in prior years, Dobson said.
“You don’t want to pay for something twice in today’s world, where supplier relationships are so critical to a company’s success,” she said. “The late payments, and ensuring that we are living up to the agreement we have with our suppliers, are equally if not more important. And managing those suppliers are critical. When there is a shortage of goods, you want to make sure that you’ve got excellent relationships with your suppliers.”
In the last year-and-a-half, even companies that were financially healthy began implementing tighter controls in these areas, Dobson said. About 64% of organizations have increased artificial intelligence or machine learning priorities in the last year. The trend accelerated when many employees transferred to remote work during the pandemic.
“And technology like AI-based solutions enable organizations to improve processes, whether or not everyone is under the same roof,” Dobson said. “Some organizations were focused on digital transformation prior to that and then exploded over the last year.”
More efficient companies are starting to spurn paper and other manual processes, which are inherently inefficient, costly, time consuming and make it “incredibly difficult for finance leaders to keep a close eye on cash,” she said.
The overall lack of transparency and control over spending in accounts payable departments can lead to significant amounts of cash being tied up in processes and inefficiencies when that cash could be bolstering bottom lines.
“Good supplier relationships don’t just happen,” Dobson said. “They require dedicated time and nurturing to create beneficial and lasting connections.”
Listen to the webcast, “P2P Automation Tactics That Will Weather Any Supply Chain Storm,” in its entirety by clicking here.
The post New Ways of Thinking About P2P Automation appeared first on Modern Distribution Management.
