The procure-to-pay process is a series of interconnected and synchronized actions performed to meet a need for products or services in a timely and cost-effective way. It entails a series of steps, beginning with assessing a requirement and ending with invoice approval and vendor payment. A procure-to-pay cycle’s steps must be completed in a certain order.
In the digital world, there is a need for new procurement to pay and new business opportunities. As a result, top procure-to-pay trends are highlighted, which brings professionalism to your business for the upcoming years and worldwide organizations. Here are some top procure-to-pay trends one must employ.
The Necessity of Digital Strategy
Digital transformation is the key element in business organization plans; it may seem like a buzzword that reflects only one thing—technology. However, digital strategy is a comprehensive term that is a necessity to ensure business resilience and continuity. It is not just the process of replacement initiative; it is a mode of thinking and a development of cross-department collaboration.
Digital strategy requires changes in processes, people, and platform, and even more than ever, it is important to have a long-term and a short-term automation road map for your future operations. As per Paystream’s 2018 Procurement Analytics study, 80% of companies still handle their procure-to-pay cycle with traditional or semi-digital technologies.
- Data and Analytics
The genuine need for data analytics has increased as CPOs and CFOs try to drive cost control and containment. On the other hand, It minimizes business disruptions. The organization is using data analytics in an advanced and predictive way to drill down and alert the staff bi insights. To sable section, every inside empowers the business as an organization to use data to look at the current state of operation and make it proactive and informed plants for the future.
In some way, that analytics can help you better identify the potential to forecast your spending and track your budgets. According to a recent Gartner research, more than half of all markets across the globe will have implemented a cloud-based procure-to-pay package by 2025. With advanced information and analytics gathered from the systems and external data sources, the organization may even avoid supply chain risk.
The organization should deliver powerful analytics which leverages the unique ability to capture all the financial data across procure-to-pay processes and import from external sources like ERP by enabling users to see the full picture. It is the best solution to make informed decisions and come up with the meaning for insights across the business with confidence.
- Machine Learning and Artificial Intelligence
The automation of the smart processes powered by data is the future for p2p operations to improve data quantity. The technologies powered by machine learning and artificial intelligence are handled as much as possible without workforce or human interference. The technology eventually gathers data performing the same job in a completely different and efficient way. A P2P system offers visibility across the distribution network, allowing buyers and suppliers to promptly see the 100 percent status of invoices.
These technologies will continue to make all the parts of the process quicker and easier to empower employees to move away from the manual task to more powerful and strategic activities. Data and analytics are the absolute prerequisites to machine learning and artificial intelligence, which predict and prescriptive the data and analytics insights.
- Risk Management
The organization is globally increasing and delivers benefits which also introduce increased risk, which becomes very apparent. The supplier management is not negotiating the lowest possible prices anymore with suppliers.
Supplier management is a risk that can no longer be an afterthought; it is the major crucial component of the management strategy and process related to business continuity. The organizations need to understand how diverse, ethically, and sustainably a supplier is and what operationally risk suppliers can cause.
The suppliers are a key component of the supply chain, and the extension of the brand in a direct way reflects the business. The organization can also leverage value-added services like supplier evaluation, data verification, and supply chain diversification to provide more ways to reduce supply chain risk and create harmonious supplier relationships.
- Leadership to Build Effective Talent Strategies
In this digital world, the organization had not prepared for the crisis of magnitude. The employees’ procurement and finance departments are also unprepared for the immediate need for remote working and severely impacting operation.
Over the last few months, According to the recent surveys, it is ensured that workplace safety and virtual working emerged as two of the top critical factors for the business’s success. CFOs and CPOs are also pressed to develop effective talent strategies which take into account new working days.
To some extent, remote working is the new normal going for the future need as the world shifts towards automation, digitalization, and employees are forced to adapt to the changes. All the employees need an internet connection and web browser to access the application they need and ensure minimal destruction for the critical business operation.
- Transparency for Enhancing the Reputation
Over the last few years, the environment is significantly shifting globally towards more sustainable business ways. The governments are not yet mandating the disclosure of this information, but the consumers are finally holding businesses more accountable in corporate social responsibility. With the increase in the importance of sustainability, organizations need to be more proactive when adapting the initiatives. Organizations should overlook the impact paper invoices to manual processes have on the environment.
The automation of p2p processes and starting with invoicing can enable the organization to significantly reduce the environmental footprint. The organization is switching from a paper-based system to invoicing results in carbon emissions and primarily savings from eliminating papers.
Cloud computing means less infrastructure is required to empower your business from a hardware and IT perspective, which decreases CO2 emissions. The business networks enable you to identify a new sustainable supplier from companies that share your values. The organization should enable the sustainable dashboards to benchmark and improve their index against other organizations in the network.
- Global Regulations
Global commerce is another trend that is not going away anytime soon. It is seeing significant growth, especially over the few years, as the business is expanding geographically to find new markets, suppliers and customers.
Global trade offers various benefits to the organization and introduces the complexities of the diverse regulation and tax laws regarding the receipt processing archival and invoice. These laws are involving adding more restrictive requirements for the risk associated with non-compliance to increase substantially.
The regulation varies from country to country. It has to team up with the solution that automatically distinguishes some pressures to stay up-to-date on the latest invoicing regulation. The organization has to gather regulatory practices knowledge from local markets, build a new formal conversion from connecting locals through the authorized compliance partners, and enable digital signatures and e-certificates.
Procurement executives select to complete the most important steps of a procure-to-pay process based on corporate practice and the demand in the issue. The new savings potential is discovered through procure-to-pay systems that digitally integrate vendors, organizations, policies, and procedures. Automated procurement software addresses all current process gaps, from avoiding human data entry to boosting expenditure visibility.