Transforming cumbersome manual processes into seamless digital ones is at the heart of numerous drives to improve business efficiency. At a stroke, digitisation can reduce accidents and errors, free up human resource to focus on more complex or strategic tasks, speed up essential operations and create more unification and consolidation amongst back office processes. Little wonder, then, that digital transformation is a key goal of many organisations.
Nevertheless, such transformation takes time, and requires both financial and human resource investment. As a result, many businesses continue to operate with substantial paper-based processes, not least in purchase to pay (P2P).
Avoid human error and fraud
However when it comes to P2P failing to adapt doesn’t come without risk. In 2012, Oracle and PwC revealed that financial reporting, cash and treasury, corporate accounting and order fulfilment were all amongst the top ten business processes most vulnerable to fraud, waste and errors. When invoice payments or employee expenses requests are reviewed via a series of manual approvals, for example, there are countless opportunities for basic human error – or more malicious activity intended to commit fraud.
Then there’s the simple operational efficiency impact to consider. The more time accounts staff need to devote to managing the purchase to pay process manually, the less time they have to dedicate to more strategic financial management. In an increasingly competitive business landscape – and one in which talented staff will soon move elsewhere if their work appears mundane – such a strategy cannot be for the long-term.
Apply digital transformation to P2P processes
So, what are the options for businesses looking to apply digital transformation to P2P? They include:
- Electronic invoicing. Digitising both inbound and outbound invoices means that paper invoicing processes become a thing of the past at a single stroke. Rather than generating Word or pdf documents, an electronic invoicing platform uses a format like Electronic Data Interchange (EDI) or XML, and issues and receives invoices via a web-based system.
- Electronic ordering. Purchase messages and other documents can also be processed electronically, delivering a more integrated approach to the entire purchase to pay process. Again, the key is to use a system which is based on web-based formats rather than Word or pdf documents.
- Automated expenses management. Reconciling and paying out employee expenses can be a time-consuming and wasteful process – not just for the accounts department but also for those individual employees. Expenses management tools typically include a scanner for automatically recording and archiving receipts, and a centralised system with inbuilt approval processes and parameters.
- Purchase systems. Modular purchasing systems enable the automation of purchasing processes in line with an overarching corporate policy. This enables tight control over who can buy what, whilst allowing standard purchases to go through automatically.
The route to improved business efficiency
A report by Paystream Advisors has suggested that around one in three organisations currently use an e-procurement solution, suggesting that while the shift to digital transformation of the P2P processes is well underway, there is still plenty of space for organisations to get ahead of the curve.
Digital transformation is the route to improved business efficiency, reduced costs and enhanced creativity and innovation across a wide range of processes and departments, and P2P is no different.