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The Ultimate Guide to Purchase-to-Pay (P2P) Automation
Most Common Questions Answered
What is Purchase-to-Pay (P2P) automation?
Manual purchase-to-pay (P2P) workflows are a prime example of inefficiency in financial processes. Imagine a world where almost every phase, from the moment an invoice is received until a payment is made, is entirely touchless, i.e., automated with digital solutions. What are the results of no human interventions? Eliminating manual data entry is just one of the many practical applications!
Welcome to the future of P2P automation!
Why automate?
Not to mention, manual processing is costly.
Check out this article to understand why you are losing money on manual invoicing.
Data entry drudgery
Hours spent manually inputting invoice data, leading to errors, backlog, and disrupted workflows.
Paper chase
Lost or misplaced invoices due to manual handling, causing significant delays, supplier frustrations, and potentially, loss of trust.
Approval purgatory
Invoices get stuck in endless loops of approval/ rejection, or worse, in a never-ending limbo. This can incur penalties and cause the business to miss out on early payment discounts, affecting the bottom line.
Visibility blackout
Limited insight into spending patterns and cash flow, making it a real challenge to deliver informed decisions, plan budgets effectively, or identify areas for cost saving.
Compliance nightmares
Difficulty tracking and verifying transactions, thus maintaining audit trails and ensuring policy compliance. This can increase the risk of receiving costly fines or encountering legal issues due to non-compliance.
What are the benefits of P2P automation?
The benefits of an effective procure-to-pay automation system do not just stop at saving resources. It also brings:
- Save both time and money: Automation slashes processing times, freeing up finance teams to focus on strategic tasks.
- Enhance accuracy, transparency, and visibility: Reduce errors and discrepancies that often plague manual processes and gain real-time insights into spending patterns and cash flow.
- Compliance made easy: Automated systems ensure adherence to policies and regulations, keeping auditors satisfied and your business safe.
- Maintain strong relationships with suppliers: Keep up-to-date records of all suppliers, make timely payments, and enhance transparency for happier suppliers.
- Reduce processing time, risk, cost, and error: Reduce processing costs and capture more early payment discounts.
- Integrate with existing financial management and ERP solutions for more accurate reporting, better analysis, and timely decision-making.
- Strengthen internal controls and eliminate fraud.
- Analyse consumer trends: Identify key suppliers/ retailers and enhance relationships with them.
Once automated, AP functions should allow all invoices and information to be documented automatically, even from sellers/suppliers who do not use e-invoices. Moreover, it should enable functions for handling routine invoices and special cases.
An effective financial management system allows a meaningful view into AP and makes information about vendors, payments due, and discounts readily available to schedule and arrange payments most efficiently. For instance, prioritising early-paid invoices to minimise penalties on late payments in the case of cash shortage.
Similarly, deciding to take early payment discounts or to hold cash until the due date or later are decisions that require the company’s current and forecasted financial conditions. Therefore, managing accounts payable is not just about accessing real-time information but also about analysing valuable information for cash flow management.
What is the current state of P2P automation and what are the trends of the future? Check out this article.
Key components of P2P automation
Modern automation systems incorporate a plethora of useful functions and features to eliminate manual workload, streamline operations, and improve productivity. These systems have transformed how businesses manage not just procurement but also their financial processes.
A P2P automation platform should provide:
- Data
- Workflow
- Payment
- Integration
- Dashboards
Data capture and extraction
A key component that makes modern P2P automation solutions stand out is the ability to capture and extract data from invoices using advanced Optical Character Recognition (OCR) technology. Yes, the days of manually re-entering data are now behind us!
OCR seamlessly captures and extracts different invoice formats from various sources (e.g., emails, faxes, ERP, etc.). This enables businesses to reduce the manual work of re-entering data, thus minimising the risk of errors and discrepancies.
Workflow automation
The last thing businesses want to do is keep chasing purchasers, managers, or vendors by manually sending email after email. Imagine invoices that route themselves to the right approvers, send reminders, and flag issues when necessary.
That is the magic of automated workflows.
A suitable solution not only provides pre-built workflows for different common processes, such as approvals, reminders, budget allocations, etc. but also provides options to customise using specific rules and conditions based on the business’ policies when necessary. Automating routine tasks frees up staff to focus on higher-value activities instead of wasting time and effort doing this tedious task.
Payment processing and reconciliation
Payment processing and reconciliation involve managing and matching payments with bank records. Automated systems can verify account balances, saving time and reducing errors.
Once approved, payments are automatically scheduled and executed, with reconciliation happening in real-time.
Integration with accounting, ERP, and other systems
P2P automation does not exist in a vacuum. It should connect well with others, such as existing ERP, accounting software, and other business systems. This integration ensures data flows freely across the organisation, and all procurement-related documents (e.g., purchase requests, orders, contracts, etc.) are stored in one place, creating a single source of truth.
A central repository enables purchasing teams and key decision-makers to organise and access documents whenever needed.
Dashboards
Role-based and intuitive dashboards provide managers with key performance insights at a glance. With real-time, updated insights on hand, businesses can make more informed decisions and optimise the P2P processes.
Still have questions about automation?
Check out this article where TRG busted the most common myths about automation. For instance, is automation only for large-scale enterprises with big budgets?
Also check out this on-demand webinar "Procure-to-Pay in: From Cost-Cutting to Value Creation" to learn more about the dramatically changing role of procurement teams today. They are no longer just a back office function. They are the strategic powerhouse for the business.
A step-by-step guide to P2P implementation
Not every employee welcomes new innovations with wide open arms. Reluctance is unavoidable.
Hopefully, the following guide will enable you and your businesses to minimise disruption while maximising adoption.
- Assessment
- Goal setting
- Solution selection
- Implementation
- Change management
- Training
Define clear objectives and KPIs for your P2P automation project. Conducting an insightful comparison between your company and others that are either in progress (or have already automated) is important to see what you can be doing better or what is working. This is a critical stage, so be sure to get executive buy-in to ensure they understand and support the initiative. Representatives from finance, procurement, and IT should also be involved during these early stages.
There are certainly countless solutions available on the market. While a suitable solution might not be able to resolve all of your issues, it can certainly resolve most of them. It is critical to balance your needs with reality, prioritising the most urgent ones. For example, does your company want to save on costs or employees’ time or gain unmatched visibility across the supply chain?
Roll out the solution, starting with a pilot if necessary. Closely review each component of the new solution to ensure any hiccups can be resolved timely.
Ensure your team is comfortable with the new system and knows how to resolve common issues before escalating them to the software provider’s support team.
And finally, regularly review and optimise the newly automated processes.
Want to explain the benefits of P2P automation to your management team?
Check out this resource: Making the Case for Automated P2P to the C-suite: A Purchase Manager's Guide
Automate your purchase-to-pay process with Yooz
TRG International is proud to partner with Yooz to provide our customers with an innovative solution capable of automating every step of the P2P process.
Yooz is a comprehensive, AI-powered, cloud-based automation solution that can empower you and your business to:
- Reduce costs by 80% by eliminating the manual processing
- Cut cycle time to hours and secure early payment discounts
- Gain instant visibility into spending and avoid lost documents
- Ensure security with Yooz's robust cloud-based security measures
- Capture 100% of invoices, regardless of channel
- Effortlessly lookup documents via a similar look-and-feel search engine
- Seamlessly integrate with 250+ ERP and accounting solutions
- Combine AI, deep learning, big data, and RPA to maintain top-notch accuracy for extracted data
- Archive documents, establish an audit trail, and mitigate fraud attempts
- Interact with suppliers, approve invoices, and more while on the go with the Yooz mobile app
- Leverage advanced technology without breaking the bank with the subscription model and unlimited user offering
At TRG International, we understand the transformative impact that robust IT solutions and automation can bring to the forefront of your business. They are the key to unlocking fresh opportunities. That's why we've partnered with Yooz to offer YOU cutting-edge solutions designed to elevate your business to new heights.
P2P automation case study: Five Guys UK
The UK branch of the popular gourmet fast food chain Five Guys faced challenges with the security and traceability associated with manual AP processes as they expanded rapidly.
Yooz was the solution of choice due to its AI, machine learning, and robotic process automation capabilities. The project took Yooz and Five Guys two weeks to implement and integrate with Five Guys’ existing financial management system.
What they have achieved as a result of the digital transformation:
- Automated 90% of invoices
- Cut down invoice processing time from weeks to just a few days
- 25% cost savings in AP operations
- Improved visibility and control over financial processes
Request a Yooz demo
Ready to transform your P2P process?
The world of efficient, automated P2P processes is within reach. Whether you are a small business looking to scale or a large enterprise aiming to optimise, P2P automation can transform your financial operations.
Want to learn more? Yooz offers a wealth of resources to help you on your P2P automation journey:
- Learn how P2P automation actually works with our on-demand webinar: "P2P Automation: The Future of Finance". Watch now
- Request a demo by simply fill out the form on this page
Don't let manual P2P processes hold your business back. Embrace the future of finance with P2P automation and watch your efficiency soar!