What is P2P? And How to Make Your Business P2P Seamless and Efficient.

  • What is P2P? And How to Make Your Business P2P Seamless and Efficient.

    What is P2P? And How to Make Your Business P2P Seamless and Efficient.

    P2P stands for “procure-to-pay” or “purchase-to-pay”. It is the process a company goes through to obtain raw materials or products from suppliers that allow them to offer their own particular goods or services.

    The process between procurement to payment is often a complicated one. It involves purchase orders, invoices, tracking, budgets, order modifications, payment, and so on. And because P2P is so important to your core business activities, it’s absolutely essential that you find a way to optimize this process. The more efficient your procurement system, the better your company is going to do.

    With the appropriate software technology and management systems, you can make procure-to-pay a seamless, efficient process. Automation is going to make the entire P2P process run more smoothly. Plus, this optimization software will more than pay for itself in terms of lower processing costs, fewer errors, and faster turn around times.

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    P2P Overview

    Procure-to-pay or purchase-to-pay covers the entire process of requesting or requisitioning items. It also includes purchasing, receiving, accounting for, and paying for the goods or services that your company needs. It’s going to include your purchasing and receiving departments as well as accounts payable.

    While every company handles their P2P system differently, there’s definitely some overlap. As such, establishing an efficient P2P system is going to have similar benefits in many different types of organizations. Across the board, automation will be the fastest and most efficient way to improve your P2P system.

    Procurement

    The P2P system starts with procurement. Here are some of the most popular or common benefits of establishing an efficient, automated procurement system:

    • Purchase Order Creation – Most automated systems include a purchase order system that allows for a smooth and uniform creation of purchase orders.
    • Punch-Out and Item Catalogs – It’s often a challenge to get employees to switch over to using an automated procurement system to place orders. Punch-out and item catalogs are two features that make the PO system as easy as shopping directly from the supplier.
    • Buying Controls – Efficient P2P systems often include buying controls or automated review and approval systems that cross-reference purchase orders to set budgets established by the company. This can help businesses avoid overspending, catch purchasing errors, track purchases by a department, or identify duplicate or unapproved purchase orders.
    • Automated E-mail – Once purchase orders have been approved, they can be e-mailed directly to the supplier. This cuts down on the time between order and fulfillment and ensures that the vendor receives a correct order.

    Receiving

    A robust purchasing system will include functionality to create receivers against purchase orders when the goods have arrived. Receiving adds a layer of spend control while also allowing management to track the timeliness of order fulfillment.

    Accounts Payable

    The P2P process concludes in the accounts payable department when your company pays for the items procured. Automation is invaluable in this department when you’re trying to create a more efficient system.

    • Invoice Processing – Once you receive invoices from the supplier an automation system can link them to any associated purchase orders or other documents related to the acquisition. This enables easy review and tracking.
    • Automated Payment – You can set-up the accounts payable system to completely automate processing for invoices that fall within your custom parameters. In most cases the system processes, approves, and pays invoices automatically. Only exception invoices require manual processing.
    • Audit trail – Throughout the whole P2P process, each document is recorded through every step. The system also links documents in a way that is easy to access and trace. This will simplify any audit process and make retrieval of any past order information easily.

    The NextProcess Difference

    NextProcess can help you upgrade your P2P system to be more efficient, simpler, and easier to use. We offer consulting services to help identify and improve areas of inefficiency so that you can enjoy a more resourceful and successful business. Our technological tools for procurementaccounts payable, and disbursement management can streamline processes and transform the way you view P2P.

    We’ve designed our software to work seamlessly together and with your existing ERPs to create a seamless P2P system. You won’t ever have to worry if the software you’re using to automate the different steps from procurement to payment will work well together. We’ve designed everything to make your life as easy as possible. Plus, we’ll be right there with you through the entire setup process to make sure your system is customized to exactly what your business needs. Click here to learn more or schedule a free demo.

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