Building Better Relationships with Operations Staff and Vendors
RPI’s industry experts work with organizations to identify significant improvements through standardization and automation of the procure-to-pay process. The results can be better financial controls, lower costs of products, reduced overhead and better relationships with operations staff and vendors.
The common components of the procure-to-pay process include:
Requisitioning – Requisitions are generated by operation staff that wish to purchase goods or services. In manual environments, requisitions are often completed on paper, or requisitions are not created at all as orders are typically called into the vendor directly. Automating the requisition function provides a method for staff to request these goods or services electronically, often selecting items from a limited catalog or template of items that they are permitted to order. This enhances visibility into the requisition process and significantly increases contract compliance.
Requisition Approval – Most organizations require approval prior to a purchase being made. In a manual environment, this often entails completing a form to request goods and forwarding that form to the approvers. This often leads to delayed and lost paperwork. Manual approval processes have long proven to be ineffective, as approvals are often not obtained or obtained after the fact due to the time required to obtain approvals. Workflow automation solutions allow for these invoices to be routed electronically, reducing approval time.
Issuance of Purchase Orders – Once a Requisition is approved, a purchase order is issued to a vendor. Without automation, purchase orders are called-in to vendors or faxed. In an optimized environment, purchase orders are issued electronically, increasing the rate of accuracy and enabling acknowledgements to confirm the order from the vendor.
Receiving Invoices - Many AP departments continue to process a large volume of paper invoices. In optimized AP departments, invoices are received electronically through EDI, electronic invoicing, and other methods. Invoices that are received manually can still be scanned and have information extracted using Advanced Data Capture, creating a fully electronic environment.
Matching Invoices – Once received, invoices should be matched to purchase orders and receipts so that an invoice is paid based upon actual goods received, at the price negotiated with the vendor. Vendor over-billing or billing in error is common, yet not all organizations use the three-way matching process to prevent overpayments.
Issuing Payments – The end of the paper check era has long been predicted. In the consumer world, it has essentially become a reality, replaced by credit and debit cards, as well as online banking services. In the world of business-to-business commerce, it has taken a much longer time for adoption to occur. However, a combination of ACH and e-payables are quickly increasing the volume of payments processed electronically, steadily reducing the number of checks issued by many organizations.
Free White PapersOptimize Your Procure-to-Pay Process
“With over 10 years of experience in optimizing Procure‐to‐Pay processes for Lawson customers, RPI combines the utmost expertise in best practices with a deep understanding of Lawson forms, tables and functionality to deliver results that make a difference.”Automating Procure-to-Pay
By Brian Rosenberg
“The number one benefit from procure-to-pay automation is simple, it will save money. Automation will allow your organization to better understand how it spends its money and act upon that information to increase compliance to contracts, negotiate better pricing, reign-in maverick buying, negotiate and take more discounts, and prevent vendors from overcharging.”