Procure-to-pay is the end to end processes managing the procurement of goods and services from an external supplier. Procure to pay (P2P) challenges occur when procurement teams spend too much time on low-value tasks such as manually inputting data into systems, tracking down required signatures or collecting paper documents costing the business time and money. While implementing a procure-to-pay solution within the business helps fix a number of these issues, there can be other procurement challenges.
Poll results
In our most recent LinkedIn poll, we asked our social media followers what they thought the biggest procure to pay (P2P) challenge was for their organisation.
Procure to pay (P2P) challenges: what we found
Integrating processes
62% of respondents selected integrating processes as the biggest procure to pay challenge for their organisation.
Departments within organisations have different buying processes and tools which make it difficult for full visibility on spend. With no clear visibility on who is spending on what, the procurement process no longer stays transparent. Furthermore, companies also frequently store data in multiple physical locations, making it difficult to have a reliable, single, integrated supplier and business data source which makes it difficult to retrieve required data in a timely manner.
Lack of compliance
23% of respondents highlighted lack of compliance as the biggest procure-to-pay challenge in their organisation.
Management of numerous purchasing channels and the regulations that govern them becomes a struggle for larger sized organisations. The basic process of expenditure pre-approval can often be disregarded, resulting in non-contracted spending and improvised purchases.
Low adoption rates
15% selected low adoption rates as their biggest procure to pay challenge.
Supplier adoption rates of procure to pay processes can also be a challenge for organisations. Businesses often damage their supplier relationships by not addressing payment queries timely. Without proper tracking and feedback systems, payments get delayed in approval processes and suppliers move on, resulting in a large loss.
Other
Finally, 0% selected ‘other’ as the greatest challenge.
While ‘other’ could represent many procure to pay challenges, one of these could be processing errors. Manual entries, processing and sign-offs slow down the procure-to-pay cycle. This results in high turnaround time for invoice approvals, late payments and potentially tarnishing the supplier relationship. Any system requiring paper and human data entry carry the risk of error. Resolving the error leads to increased cost per invoice and reduced staff productivity.
More information
B2BE’s experience in the supply chain sector allows our customers to build, expand and adapt successfully, enabling greater effectiveness. To engage with B2BE and offer feedback on what matters most to you and your business, make sure to follow us on LinkedIn and across social media. You can also vote in our latest LinkedIn poll. If you’d like to discuss your supply chain strategy, get in touch with us.
Learn more about our Procure to Pay Solutions.