As a CFO, you understand how important a well-functioning procure-to-pay (P2P) process is to your company's finances. Yet we often find that unnecessary manual tasks slow down work, tie up capital and introduce unnecessary risk.
To break out of the traditional pattern, you need to optimize your P2P workflow. In this article, we'll take you through five steps that will help you implement an effective P2P solution.
#1 Analyze and assess your current status and process
Before you start your digital transformation, it's important to understand your current P2P process.
- Map the process: Create a visual overview of the entire P2P process, including all elements such as requisition, ordering, invoice matching, approval and payment. Identify areas where automation can increase efficiency, as well as where there is duplication and manual tasks.
- Identify bottlenecks: Find the areas that create challenges in the process. Where do the delays occur? What common mistakes are occurring and where do you lack visibility?
- Measure against KPIs: Benchmarking is important. How much time do you spend on purchasing and supplier agreements? How long does it take from invoice receipt to payment? Identify relevant KPIs to measure current performance.
#2 Develop a business case and get support
To secure senior management's support for your P2P automation project, it's important to present a compelling business case based on concrete data and documented ROI (Return on Investment).
- Set clear, measurable goals: Be realistic and concrete when setting goals. Set goals related to process efficiency, cost savings and ROI.
- Quantitative analysis: Use the benchmark data from step 1, along with other relevant information, to show how you can improve your KPIs. Refer to industry standards for processing time, error rates and cost per invoice.
- Risk reduction: Explain how automating the P2P process will strengthen internal controls, ensure regulatory compliance and reduce supply chain risk.
- The cost of doing nothing: Show the cost of not optimizing P2P processes. Point out how this can weaken the company's competitiveness, delay financial processes and add unnecessary costs.
#3 Choose the right P2P solution and leverage XAI technology
Finding the best P2P solution for your business is an important decision and you need to consider your options thoroughly before choosing a provider. In today's market, most P2P systems use AI, which is both an advantage and a challenge. Many AI systems operate as a "black box", where the results are difficult to understand because it is not clear how they are calculated.
eye-share Workflow uses XAI (Explainable Artificial Intelligence). This is a form of AI that makes it easy to understand how and why decisions are made. XAI tools provide insight into how the system arrives at its results, so you can be confident that the decisions make sense. Read more about this in our article As a CFO, you need to know this about AI.
When evaluating suppliers, you should also consider:
- The automation possibilities: Choose a P2P solution that can automate manual tasks and streamline your workflow.
- Integrations: Make sure your P2P solution can easily integrate with your existing accounting programs, ERP systems and other data systems. This simplifies your workflow and prevents the formation of data silos.
- Ease of use: The solution should be easy to use and provide full insight with clear reporting tools. P2P solutions using XAI also ensure transparency in decision-making.
- Scalability: Think long-term. Make sure the solution can grow in line with the company's needs.
#4 Create an implementation plan
In order to successfully implement a new P2P solution, good planning is essential. Here's a structured approach you can follow:
- Put together an implementation team: Involve representatives from all key departments, such as procurement, accounting, IT and management. This ensures that all relevant parties are involved and supportive of the project.
- Build a phased approach: Break the implementation into manageable phases, focusing on the most critical or problematic areas first.
- Set aside time for testing and training: Make sure there is enough time to thoroughly test the system and provide training to employees.
- Address employee concerns: Demonstrate how the new P2P solution will improve their day-to-day work by removing time-consuming, manual tasks.
#5 Measure, analyze and improve
The success of your P2P project doesn't end with implementation. To maximize your return on investment, you need to focus on the following:
Measure: Continue to track and measure the key indicators. Typical targets include:
- Reduction in processing time
- Cost savings
- Reduction in error rates
- Improved regulatory compliance
- Increased user satisfaction
- Documented improvements in business performance
Analyze: Thoroughly review the data. Ask yourself questions like:
- Where do you see significant improvements?
- What areas still need adjustment?
- Are there processes that are still causing delays or errors?
Improve: Remember that this is a continuous process. Steady, incremental improvements will maximize the value of P2P digitization over time.
Bonus tips: Regularly benchmark against industry standards and best practices to improve and set new goals.
Want to learn more about the P2P process?
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