Procure-to-Pay (P2P)

Does it ever feel like AP and Procurement don’t speak the same language? You’re not imagining things.

Often, issues as basic as “unit of measure” and “unit of price” can differ between the two functions, grinding the payables process to a halt and preventing the supplier from being paid.

Here are examples:

Unit of Measure… Read More — To manufacture bottles of pills, procurement orders 100,000 foil tops. But they don’t come as individual t
Last time… Read More, we explored how to match payment control channels to payment risk. The less the risk, the less rigorous the payment controls need to be. For example, for dealing with the risk of an unauthorized spend amount, a credit card solution might be sufficient. On the other hand, running out of stock in a manufacturing company is a business-critical risk, and is better managed through three-way matching or evaluated receipt settlement on the ba

In part 3 of this series, we discussed three-way matching and whether it’s consistently necessary. There are alternatives to streamline that process by eliminating one or more steps, depending on type of spend.

In this installment, we’ll take a more in-depth look at risk factors by spend category.

Step Four: Assessing the Impact and Probability of Risk

Read More

What’s worse than unauthorized spend or unearned payments? A lot, actually. To adequatel
This article is the third in a series based on a Hackett Group white paper entitled, “Defining a Source-to-Pay Channel Strategy that Balances Risk, Control and Efficiency.”

In Part 2 of this series… Read More, we talked about guided buying, a technique in which the number of options at each step of a source-to-pay cycle is reduced in order to simplify the end-to-end process. By reducing the number of possible permutations of transaction pathways from th
This article is the second in a series based on a Hackett Group white paper entitled, “Defining a Source-to-Pay Channel Strategy that Balances Risk, Control and Efficiency.”

In Part 1 of this series, we discussed a technique called “guided buying,” in which organizations adopt a streamlined source-to-pay cycle in order to reduce the complexities associated with offering too many options at each stage of the source, buy and pay cycles.

Read More

The
This article is the first in a series based on a Hackett Group white paper entitled, “Defining a Source-to-Pay Channel Strategy that Balances Risk, Control and Efficiency.”

Read More

Becoming a world-class procurement organization sounds like a lofty and difficult goal. With revenues—and spending—in the billions of dollars, large organizations must often juggle processes and priorities within operations in multiple countries, spread across many te

Approaching continuous improvement in a P2P environment can seem like a daunting task. It can be difficult to determine how to begin an endeavor that, by its very name, has no end. Matthew Molter, Manager of Properties and Procurement Support at Meijer, a grocery store chain with 200 locations across Ohio, Illinois, Indiana, Michigan, Wisconsin,...… Read More

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Jess Scheer

Continuing Education Manager, IOFM

Most organizations run P2P in two separate silos: Procurement is responsible for selecting and negotiating terms with vendors and then ordering goods or services from those vendors. And then the purchase gets tossed over the wall to AP to pay for it.

At very small organizations, this distinction is blurred. Procurement and AP may be done by the same person or by two people who sit near enough to e… Read More
Process improvement forum link_rev

When AP practitioners discuss improving P2P, the conversation almost invariably focuses on automation. Which technology would accelerate how quickly we: scan invoices, match the invoices to POs, process and then reconcile the payments, etc.?

While various systems can enable improvement, they should not be the first place AP practitioners look to make their processes more effective or efficient. Automation is expensive, and it’s risky if taken … Read More

Process improvement forum link_revPhase #3: Are You Ready to Automate?

Phase 3

Step 5 — Considerations Before Investing in New Technology

One of the most common, and expensive, mistakes made when trying to improve procure-to-pay is investing in a technology solution too early.

It’s easy to fall into the trap: You identify an inefficiency in how the work gets done and think there’s got to be a better way. And in that mindset you’re susceptible to believing that a technology i… Read More

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