Procurement of goods is a vital corporate function. Needless to say, an efficient workflow that starts from procurement and ends in paying for the goods is very important to ensure that expenses are within the company’s budget and that costs are kept at a minimum.
Procure to pay solutions is the key to effective supply chain management. By integrating the purchasing process with the automated accounts payable function, an organization can strengthen its controls over purchase authorization, expenses recognition and invoice validation. Paperless procure to pay transactions are way better than manual processing since circumventing the proper authorization channels is virtually impossible.
The streamlined procure to pay workflow needs to become a part of the overall accounts payable processing. With full automation of the organization’s operations, a company can impose its business policies in a stricter manner as the current system will not permit transactions unless there is proper authorization. With this feature, it would be difficult to circumvent rules and it would allow the company to build rapport and stronger ties with its suppliers.
In the case of the purchasing function, all employees need to create the necessary source documents especially the purchase order and the receiving reports. Through this automated procure to pay process, tight collaboration with suppliers also becomes necessary to create an automated invoice system where suppliers can just enter a portal where they can bill a company automatically. With the current setup of most business organizations, a web-based procurement to pay solution is necessary as it would be easier to access the system even if you are out of the office.
The systematic procure to pay workflow where errors are virtually eliminated and the company’s liabilities are immediately recognized when incurred, allows management to make timely decisions that will allow the company to become more efficient and profitable. Through a streamlined purchasing function, a company can rest assured that the actual goods received reflects the amount billed on the vendor’s invoice and the goods requested in the purchase order. With an automated procure to pay function that is fully integrated with the current system of an organization, a company can minimize costs and operate more efficiently.