Everything you need to know about the digitalisation of Procure-to-Pay

SUMMARY:

Introduction

KPI

Best Practices

Introduction

Procure-to-Pay as a driver of digital transformation

Financial decision-makers have a strategic role in business processes that enables them to be leaders of digital transformation projects. Among these, the digitalisation of the Procure-to-Pay (P2P) process is one of the priorities.

The supplier invoicing process (one that is still often manual, complex, time-consuming and a source of costs and disputes) is the first natural step in the P2P digital transformation journey and a key performance lever.

Once P2P automation is in place, it becomes an outstanding example to demonstrate the digital transformation capabilities of the organisation and gives CFOs a role as leader in the field.

55%

organisations consider that CFOs will be leaders in digital transformation

PWC Study 2020 – Priority of Finance Manager

60%

of finance departments believe that digitisation is one of their main priorities

PWC Study 2020 – Priority of Finance Manager

KPI

Procure-to-Pay automation: how to maximise benefits?

Digitising the Procure-to-Pay process offers a number of benefits: productivity, auditability, traceability, risk management, resilience, real-time control… Meaning, costs and processing times of supplier invoices can be considerably reduced as demonstrated by numerous studies:

Cost of processing an invoice: £19 in manual processing; up to less than £2.60 for automated processing
Processing times: Manual processing can take more than 15 days, but when automated can take less than 3 days.

Organisations that get the maximum benefits from P2P digitisation have shared best practices:

Make use of maximum automation
Scanning automation and invoice data validation are the cornerstones of performance. Every automation percentage counts! Look for a solution provider that guarantees you a minimum automation rate. For instance, at ITESOFT, we guarantee a minimum of 85% of automation rate.
Make use of highly adaptable processes
More than 15 days for manual processing and less than 3 days if automated.
Be capable of anticipating new technological developments (AI, RPA, Blockchain...), new regulations (e-invoicing, Duty to Report...), and take advantage of them. Making use of an up-to-date and adaptable solution is therefore essential.

Best Practices

How to successfully implement your Procure-to-Pay digitalisation project?

How can you make your P2P digitalisation project a success and ensure that your objectives are met? Successful digitisation requires choosing the right solution. Several criteria must be taken into account:

Simplicity: Is the solution pre-configured and ready to use? Is it easy to adopt to the company's operations?
Performance : Does the solution provider commit to a minimum automation rate?
Security:  Are fraud detection mechanisms (false invoice detection, fake supplier detection etc.) systematic, before the invoice is paid? Is the data embedded in the solution?
Comprehensiveness: Does the solution offer more than accounts payable automation?
What about digitisation of purchases to optimise control?
What about supplier relationship management to streamline exchanges and increase compliance? Or what about business management to analyse and optimise processes?

Once the solution has been selected, successful implementation requires good change management practices: defining clear objectives, obtaining the support of management teams, involving all stakeholders.

Beware of traditional methods (V-cycle), which have shown their limits and do not allow you to make the most of the cloud: difficulty of development, tunnel effect, gap between what is expected and what is achieved…

Today, agile and practical methodologies such as ITESOFT's Quickstart methodology, offer a rapid production start-up, enabling the business to familiarise with the solution, and develop it in line with business.

The bonus: better user adoption, ROI from the start of the project and a faster, more controlled deployment.

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