How Can Contract Management Be Streamlined Using Procure to Pay Automation Software?
Every organization consists of repetitive and administrative tasks. These repetitive and administrative tasks involve many paperwork and time-consuming processes. But with the help of a software called procure-to-pay automation, it enables the organizations to automate all the repetitive tasks. As a result, even contract management can be streamlined using procure to pay cycle.
Procure to pay automation is an old concept. It's just that the traditional procurement management software only focused on data storage and didn't offer any solutions for complex tasks. Procure to pay automation is also called P2P automation. It automates manual tasks by eliminating inconsistencies and delays.
The help of P2P automation improved the procure-to-pay process's efficiency. Procure to pay process is the integrated and coordinated activity taken to fulfill the requirements of goods or services promptly. The procure to pay can also be called purchase to deliver software.
The procure to pay software was developed to improve the efficiency of the process, such as vendor evaluation, selection, and payment with the help of technology. The benefits of procuring to pay software are:
- Reduction of errors and fraudulent activities.
- Enhance the supply chain management process.
- Improved compliance.
- Enables a better understanding of business operations.
The procure to pay software enables the organizations to increase the efficiency of the procurement process.
Six Procure to Pay Process to Automate
Identifying the process which needs automation was a difficult task. It was considered as the major drawback of procure to pay automation. Here are the six methods which need automation. They are:
- Vendor management
Vendor research and selection are typically made using a specified list of vendors or existing partnerships. If a suitable vendor cannot be found, the following stage in the Purchase Requisition process may be the first.
P2P automation vendor management system necessitates the creation of a centralized, digital database of goods and services and the vendors who provide them. Automation allows real-time access to orders, delivery, price, and vendor performance via an ERP or financial software, making vendor selection informed and straightforward.
For faster choices, notifications are provided promptly within the financial system of the procurement process. The entire process is tracked and transparent, allowing anybody engaged to see where the process is at any given time, reducing the risk of accounts payable fraud.
- Purchase requisition
A purchase requisition is known as req for short. The process is set up to facilitate the internal approval process for placing an order for a service or a product a company might need. The requester of the department issues a formal document that helps raise a purchase requisition.
The process is manual and time-consuming. Due to its manual nature, the accuracy is not 100% correct. In addition, purchase requisitions need to go through several internal procedures. To decrease the time taken for this entire process, purchase to pay software can help speed up the process and automate the task.
Peer-to-peer automation is the process of using an ERP or finance software to automate the process of issuing and approving purchase requisitions. When the approver receives notification from the software that a purchase requisition has been filed, they review it and approve or deny it.
- Purchase order
Now a purchase order needs to be issued. A purchase order, or PO for short, is a legal document that provides specified specifications and quantities for the vendor. The PO is usually prepared using ERP software such as purchase to pay software.
When the approval is issued, a PO is created. The purchase order and the requisition form (together with all vendor information) are saved in the same financial system, which is usually an ERP. Using P2P automation, you can sync your software with your ERP and fetch open POs for matching.
- Purchase invoice approval
The vendor will then mail or email an invoice to the organization, which is usually included with the product or service. When the invoice arrives at the company, the accounts payable department will compare it to the supporting papers, such as delivery receipts, POs, and other paperwork needed.
The manual P2P process typically involves sending emails to the receiving department to confirm delivery, chasing bills that may have arrived in any department, and matching the PO to the invoice using two screens. After that, the organization evaluates and approves the materials.
The vendor sends the invoice to the automated accounts payable system using the purchase to pay software. The data is subsequently collected and stored in a centralized system automatically. If your software is integrated with your ERP, it can automatically pull supporting documents from the ERP, such as a PO. With auditable tracking of all invoice actions, including invoice communications, the software provides comprehensive control and visibility over invoice processing.
After validating the invoice, the digital procurement process can send it to the necessary parties for evaluation and approval. Approvers can raise unanswered questions or approve the invoice with all the relevant context supplied on the unified invoice. Regardless of the outcome, both scenarios result in faster invoice determinations.
Once the invoice is accepted and payment is made to the vendor, the procure-to-pay process is complete. When the invoice has been approved, the final step is to release it for payment. While some software lets you process payments in your way, others force you to use their payment solution.
If the payment is made using an ERP system, the software will automatically deliver the authorized invoice or payment details into your system. Of course, this depends on how your firm processes payments, which is one of the advantages of some automation platforms' payment flexibility.
Procure to pay automation is critical for dealing with the vast volumes of data created throughout the process, increasing visibility and oversight, and identifying and removing workflow barriers.
- Contract management
The contract management process involves managing the existing contracts and storing the old ones. Reviewing contracts and ensuring compliance takes a considerable amount of time. With the help of procurement management software, it helps the organization to create consistent purchasing contracts. It is also possible to maintain a predefined contract management loop. It helps to review and monitor contracts at regular intervals.
Procure to pay software enabled the organization to simplify all the repetitive tasks. For example, contract management, vendor management, purchase order, invoice approval, and requisition became easy. Wep solutions ltd is one such procurement management software that helps the organization in the procurement process. For more details, check out our official website, Wep Solution.