Visibility in P2P can help you evaluate your suppliers, reduce risk within the supplier network and keep in control of indirect spends. Despite this the majority of organisations lack visibility into supply chain. According to one study, just 6% of firms have achieved full supply chain visibility, while 51% of organisations are still collecting information from multiple systems.
The result of this is that it is difficult for many organisations to measure their performance in purchase to pay. And without the ability to easily measure the impact of procurement policies and spend control measures, the impact they can make is minimised. Equally organizations lack the visibility they require to spot when, and where, their procurement practices are going awry.
The simple solution to these challenges is a purchase to pay (P2P) solution. Let’s take a look at some of the challenges a lack of visibility causes and how a P2P solution helps to alleviate them.
Spotting suspicious sellers
One of the major challenges a lack of visibility creates is fraud. For instance, in the UK alone, small businesses lose £9bn per year to invoice fraud when employees are duped by duplicate invoices and fooled by fake emails. P2P automation software provides the visibility you need to spot suspicious activity and eliminate the most common instances of supplier fraud. By centralising purchase orders, invoicing and PO matching, and providing easy access to all of this in one easy to view platform, P2P software can prevent your business falling prey to fraudsters.
Good relations with good suppliers
A further challenge is ensuring that everyone within the organization is only using approved suppliers. Without full visibility it is virtually impossible to prevent purchases being made from suppliers that haven’t been pre-approved. P2P enables organizations to enforce approved supplier policies by providing a single point of access for procurement. This can help to keep suppliers happy by ensuring the volume of orders promised, providing leverage for discounts. And when suppliers are no longer providing the value they once delivered (maybe their prices have changed, their product range has become limited or the business’ goals have shifted elsewhere), a P2P solution can notify you when it’s time to renegotiate the contract.
A final challenge caused by lack of visibility is that payments get delayed, slowed down by the need for data to be pulled together from numerous sources, then evaluated and approved manually. A P2P solution centralises all this data enabling the procurement team to get out of firefighting mode. In turn this can lead to organizations making earlier payments, which often provides leverage to negotiate further discounts.
P2P automation software makes it easy to achieve complete supply chain visibility. The right P2P solution records and reports data automatically. Acting as a single point of access for the processing of all invoices, purchase orders and business documents, it helps you stay in complete control, providing a 360° view of the entire process.
A P2P software also provides the visibility needed to help organisations measure success, and to enable finance and procurement departments to meaningfully collaborate to set effective strategy.
Find out more about Palette AP Automation here.