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

SUMMARY:

Introduction

KPI

Best Practices

Introduction

P2P as a driver of digital transformation

Financial decision-makers have a strategic role in business processes, enabling them to be leaders of digital transformation projects. Among these, the digitalisation of the Procure-to-Pay process is a priority.

The supplier invoicing process (one that is still often manual, complex, time-consuming, and a source of costs and disputes) is generally 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 showcase to demonstrate the digital transformation capabilities of the organization and gives CFOs a role as leaders in the field.

55%

consider that the Finance and Administration Division will lead the way in digital transformation

PWC Study 2020 – Priority of the Finance Manager

60%

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

PWC Study 2020 – Priority of the Finance Manager

KPI

Procure-to-Pay automation: how to maximize the benefits?

Digitalizing 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 the supplier invoice can be considerably reduced, as confirmed by numerous studies:

Cost of processing an invoice:
$21 in manual processing; up to less than $3 for automated processing
Processing times:
More than 15 days if manual. Less than 3 days if automated. These performances are some of the best.

Organizations that get the maximum benefits from P2P digitalization have told us about various good 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 you a minimum of 85% automation rate.
Make use of highly adaptable processes
More than 15 days in manual and up to less than 3 days if automated
Be capable of anticipating developments in technology (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 P2P digitalization project?

How can you make your P2P digitalization project a success and ensure that your objectives are met? Successful digitalization 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 for the company's operations?
Performance: Does the solution provider commit to a minimum automation rate?
Security: Are fraud detection mechanisms (false invoices, false suppliers, etc.) systematic before the invoice is paid, and is the data embedded in the solution?
Comprehensiveness: Does the solution offer more than accounts payable automation?
What about digitalization of purchases to optimize control?
What about supplier relationship management to streamline exchanges and increase compliance? Or what about business management to analyze and optimize processes?

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

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, and gap between what is expected and what is achieved...

Today, agile and practical methodologies such as ITESOFT's Quickstart, capitalizing on more than 1,000 digital transformation projects, offer a rapid production start-up to enable the business to familiarize themselves with the solution in a real situation, and then develop it along the way according to their real needs. The bonus: better adoption by users, ROI from the start of the project, and faster, more controlled deployment.

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