P2P - AP & Purchasing

If you are grappling with the costs and inefficiencies of time-consuming and inefficient processes, it may be time to take a closer look at what automation can do for your P2P operation. 

Automation can promote better supplier relationships, establish service level agreements, and help you better manage your relationships with suppliers. Technology can also assist in negotiating better contract terms and prices, creating improved visibility,… Read More

As technology and business requirements evolve, the Procure-to-Pay (P2P) cycle needs to be revisited from time to time by Purchasing and AP to ensure it is meeting both internal needs and the needs of suppliers.

Specifically: a P2P improvement team should be formed to:

  • Define the roles and duties of the people involved in the P2P process;
  • Develop training. Employees …
  • Read More

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

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
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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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Phase #1: Know What and How You Execute P2P

Phase 1

Step One: Define the Problem

Improving procure-to-pay (P2P) isn’t just about squeezing out costs or freeing up time. Poorly run processes can damage your relationship with your end customers and drive away your best employees.

Case in point: At a mid-sized IT services company, the combination of multiple legacy billing systems and no centralized master data system meant that when a customer return… Read More

 Process improvement forum link_revPhase #2: Standardize and Specify How the Work Gets Done

Phase 2

Step 3: Standardize Roles and Responsibilities

Identifying how the process should run, and by whom, is crucial to driving improvements

In the first installment of this series, we discussed the importance of: standardizing the language your company uses to describe each piece of procure-to-pay (P2P), knowing how those pieces fit together, and empowering one person to “own” the endRead More

By Pam Miller, APMD The absence of an “R” (for receiving) in the term "procure-to-pay" (P2P), symbolizes the state of receiving in many organizations. While receiving is a function that has evolved over time, it is often overlooked or operating inefficiently. Effective Receiving Is the Foundation of Effective P2P The fact is, accurate and timely...… Read More

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