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Bringing P2P to Professional Services
Procure-to-pay (P2P) automation software has been a hugely popular way to improve back office processes. Their long-term effectiveness has been demonstrated for a variety of different sectors. But every industry is different and their needs should be examined separately. A recently completed survey of professional services organizations has some interesting finds. Even progressive companies can struggle to eliminate cumbersome back office requirements.
Looking at The Numbers
Professional services organizations are a bit behind the country overall when it comes to automation processes. Over 70% of organizations surveyed didn’t have an eProcurement system to create purchase orders and control spending. Having one of these systems isn’t always a need for businesses like this. Services companies usually don’t need to keep a stocked inventory of materials to keep selling. Looking at Accounts Payable, although they receive a lot of invoices electronically, the industry as a whole has a lot of manual entry and longer approval times—the average is 17 days. Long approval times usually mean manual approval processes—interoffice communication and physical signature approvals are the most common culprits in modern account payable.
Why Not Automate?
With as long as P2P software has been around, the benefits are almost self-evident. Even with available information, finance departments in these organizations that want to automate are often facing difficult odds. Lack of executive sponsorship is a frequently cited reason for avoiding P2P automation, often because there’s difficulty establishing ROI when talking about potential benefits. Relatively small size is a factor when considering whether or not to automate. Many of the organizations surveyed had a relatively low revenue. But, doesn’t this just mean every dollar matters more?
Strategic planning and smart sourcing can bring you a solution that meets your company’s needs while reducing costs and changing the way you can use your employees. Manual procedures are inherently expensive and are simply always going to cost more. Exploring automation tools and techniques is more cost effective than avoiding them—often in the short and long term.
Solutions for Professional Services
We know that P2P automation isn’t a one-size-fits-all idea. A lot of companies need flexibility and customizable solutions. Everyone’s processes are different and professional services is no exception. As mentioned earlier, professional services organizations aren’t necessarily going to gain a lot from implementing an inventory-based purchase order system. The tendency towards project-based spend is a big factor in this too—it makes more sense to tie purchases to a project’s budget than to a vendor or catalog item. For these types of organizations, we want to look at where the most impact is possible.
Adding document management solutions is a good first step for any business still struggling with paper. To reduce the amount of manual entry, a solution like NextProcess’ AP Automation software that can automatically GL code invoices, route them for approval, and then import them directly into the ERP system—no manual entry required. Expense reporting software is another area where automation would have a great impact for professional services companies.
Automation is growing every day. P2P software companies are developing new solutions that can make improvements for businesses of any size across varying industries. Finding a cost-effective solution can be time-consuming but the long-term benefits of automation and eliminating manual processes are tremendous. Call today and see what automation can do for you!