The procurement process of a Medius, from requisitioning through payment, is referred to as procure-to-pay.
The “Procure to Pay systems” include everything from product research to updating account receivables. Among these 2 steps, the following activities can be found:
- Look up items on the internet
- Set up a shopping cart.
- Make a purchase order requisition.
- Process and approve the transaction.
- Make your purchase order.
- Take possession of the merchandise
- Examine the order for consistency.
- Obtain the invoice
- Reconcile the invoice and proceed with the processing.
- The invoice must be paid.
- Accounts payable should be updated.
Each Medius’s Procure-to-Pay process is obviously unique, and it may incorporate additional stages.
What are Procure-to-Pay (P2P) solutions?
Users are presented with suppliers’ items (through Punch-Out catalogs, e-catalogs, and APIs) and then the procurement and finance processes are digitized, automated, and enhanced. They include actions like control, verification, validation, and document management, allowing businesses to have more control over their purchases and increase efficiency.
Gartner defines Procure-to-Pay as follows from a technological standpoint: “A Procure-to-Pay (or Purchase-to-Pay) system is a fully integrated solution that supports an end-to-end process that starts with requisitioning goods and services and ends with ready-to-play files for upload into an accounts payable system. To enable suppliers to submit invoices electronically, procure-to-pay solutions use a scan-and-capture service, a supplier portal, and/or a multi-enterprise network. Procure-to-Pay systems enable purchase-order-to-invoice matching and processing for invoices that don’t match or when goods are returned, in addition to core e-procurement features (such as e-requisitioning, approval workflow, and e-catalog management).”
So what were the advantages of Procure-to-Pay (P2P) software?
Procure-to-Pay solutions are extremely effective at improving procurement department performance by:
Improving the efficiency of the process
Manpower costs, processing times, and dangers are all reduced when procedures are automated.
Increasing control and visibility
Consolidating and collecting data provides businesses with more clarity and control over their spending.
Teams’ skill sets are being improved.
Procurement teams can focus on objectives with more strategic value for the organization instead of spending time on manual and repetitive administrative activities.
Procurement divisions can focus on value-added responsibilities like sourcing, innovation, end-user intimacy, and strategy because the Procure-to-Pay process is very easy to automate.
Procure-to-Pay (P2P) and Its Importance for Businesses
Definition, Process, and Benefits of Procure-to-Pay (P2P)
If you run any kind of business, whether it’s traditional, digital, or hybrid, you need to know about the procure-to-pay process and the automated solutions that can help you manage it.
Your procurement and accounts payable teams should be able to examine the status of a transaction at any moment, from the time a product or service is ordered to the time an invoice is paid.
We’re going to speak a lot about the procure-to-pay continuum in this article, including what it implies and how to use digital technologies to help.
Who is Procure-to-Pay and how does it work?
At its most basic level, this is the process by which a requisition is created, an order is placed, and payment is made based on an invoice from the supplier once the order is received.
Procure to pay (or P2P) is an automated system that connects procurement and accounts payable to streamline the process, verify the accuracy, and save money and time.
The Procure-to-Pay process is broken down into several steps.
The seven basic steps in the P2P method are listed below. It’s worth noting, though, that not every corporation uses purchase orders for every purchase.
When distributed across an entire organization, we believe that a lack of POs can result in large losses. Furthermore, businesses that have not established a digitized system to automate this business process are still vulnerable to human errors, which are common when paper and manual processing are used.
These businesses also face late payments as a result of disagreements, as well as a complete lack of visibility into the status of invoices in real-time.
Purchase requisition – Once management (in any department of the firm) has recognized and approved a requirement for a certain product or service, the request is sent to the procurement department. The need that initiates the P2P process is referred to as requisitioning.