P2P Automation Drives More Value From Every Transaction

Admit it, you loath wasting time on boring, repetitive, time-consuming manual tasks. Yes, they’re critical. But a snooze fest. The procure-to-pay process is just such a task. Zzzzz. Mountains of paperwork. Compliance issues. Comms that go round and round in circles. If this is your life. If your people are asleep on their keyboards, P2P automation is your wake up call.

Sure. We can show you how we can help you automate your procure-to-pay processes.

Your P2P process has an impact on your revenue and business operations. To future-proof your business, the process must be optimized. An automated P2P process will reduce errors, increase visibility, save money, and increase productivity. It’ll bring transparency, risk management, and full compliance.

Manual invoice process = $2.03 per invoice. 12.5% needed rework. 5.5 minutes to rework invoice. 105 keystrokes per invoice. 111 seconds per invoice. 3,840 invoices per month per FTE. P2P automation of process will increase efficiency and save time and money.

Manual invoice processing is inefficient, expensive, and error-prone.

Your purchase-to-pay process is unique to your business, but the strategy is consistent across the board. Regardless of industry. Our guide is going to walk you through all you need to know about P2P automation. The benefits it’ll bring, processes you can automate, and how to choose the best purchase-to-pay automation solution.

An example of an automated accounting process, which can be applied with P2P automation to your processes.

Example of automated accounting process.

What is the P2P process?

Also called purchase-to-pay, the procure-to-pay process covers the end-to-end workflow from the need to purchase goods or services, to choosing a supplier, and finally, payment. The P2P process is usually performed by your procurement team and your accounts payable team. 

Steps in the procure-to-pay process include…

  • Choose a supplier using RFQs to evaluate pricing, quality, customer service, compliancy, etc.
  • A purchase requisition is raised and approved for products or services that your business needs.
  • The purchase order is submitted with the details of the purchase – quantity, price, delivery, terms and conditions.
  • The purchase order is passed for approval, potentially through multiple levels of approval.
  • After delivery, your team verifies the correct receipt of goods and adds to your inventory management and accounting systems.
  • Following the receipt of goods, your supplier sends an invoice which is matched with the PO and goods receipt note – GRN – to confirm accuracy. If they don’t match, the supplier is contacted to dispute the invoice.
  • After the invoice is accurately matched and verified, it’s passed for payment approval.
  • Once approved, your AP team makes payment to your supplier, with the total paid added to your accounting system. 

The procure-to-pay process is a big ask when handled manually. Slow, time-consuming, error-prone, and labor-intensive, the chances of human error are great and your business is vulnerable to AP fraud.

What is P2P automation?

P2P automation streamlines the entire P2P process – purchasing to accounts payable – by automating each step. Including generating purchase orders, capturing invoices, and data entry. Eliminating potential inconsistencies and delays.

The benefits of P2P automation are many. Such as spend visibility and automated spend analysis, increased efficiency, improved communication with vendors, departmental collaboration, greater control of your supply chain, and cost savings. 

More about the benefits later…

Cutting down the number of time-consuming, repetitive tasks your team has to perform will free up your team to focus on tasks that drive revenue and growth

The best P2P automation solution can integrate with your existing accounting software and ERP system. According to The Hackett Group’s Purchase-to-Pay Software Solutions Provider Perspective report, the best P2P solution providers help businesses reach higher value creation than other businesses. Including…

  • 73% touchless requisition-to-purchase order transaction automation
  • 68% key supplier adoption and transaction automation
  • 40% – 60% improvement in spend visibility and spend management

What are the benefits of P2P automation?

As we’ve established, the procure-to-purchase process has many steps and involves multiple teams. Automating the P2P process saves money and increases efficiency. Eliminating manual processes that your finance team has to perform when working with invoices. Transactional document automation brings high-value benefits including…

Increased productivity

Automation simplifies and standardizes your P2P process. Cutting out the need to manually send purchase orders, chase approvals, match POs and invoices, etc., reducing processing times and allowing your team to concentrate on business operations that’ll drive growth in your market

Save money 

If you automate your P2P process, labor costs will be reduced, you’ll avoid late payment penalties, and have more agreeable contracts with suppliers.

Full visibility

Automating your P2P processes gives you full visibility of your transaction data. This’ll help you meet your spend management goals. Analyzing spending against your budget, P2P KPIs, and ways to save money.

Reduced errors

Repetitive manual tasks are boring and error-prone. Humans are easily distracted and fat fingers can become a costly issue. 

Automating your processes eliminates data entry errors and tracks P2P processes end to end. Invoices will be tracked to ensure punctual payments. With data validated against the relevant PO and goods receipt note. 

Spend control

Automating your procure-to-pay processes means your team is able to work on value-adding tasks such as identifying discounts and bonuses, building stronger relationships with suppliers, and areas to increase efficiency and reduce spending.

P2P automation identifies real-time insights into spend, so you’ll be better able to manage your budget and track your suppliers’ performance.

Reduced fraud

There’s no escaping fraud, but you can protect your business against it. Automating your procurement processes and accounts payable processes reduces the risk of fraud by implementing internal controls on purchasing

The stringent examination of documents means that fake invoices from scammers are quickly identified. To learn how to identify fake invoices, check out our recent blog post.

Improved compliance

P2P automation solutions will make financial reporting a cinch, with an audit trail for each or your transactions. 

Laws and regulations will be followed, guaranteeing that following regulations, and non-compliance and the fines that can be imposed are avoided.

Accelerated approvals

How involved is your approval process? How many people are required to sign off on a procurement request?

In many companies, the approvals process is a communication bottleneck. Multiple people involved, missed comms and endless follow ups can mean the process takes days, if not weeks.

An automated invoice approval workflow notifies the appropriate people that their approval is required, along with a deadline. Saving your team time chasing down sign offs. The purchase requisition will automatically move to the next step in the process once the previous step is completed.

Stronger relationships with suppliers

Keep missing or delaying payments to your suppliers and relationships will quickly sour. Automating your P2P process ensures that purchase orders, invoices, etc., are accurate and will always be sent on time

Which P2P processes can I automate?

Automating your procure-to-purchase process simplifies your business’ transactional operations and breaks down communication bottlenecks. Collaboration between teams is improved, along with your supplier relationships.

In the past, it was all about data storage. With no consideration on how to alleviate time-consuming and sticky processes. The introduction of AI document processing changed all that. Along with a reduction in errors, tactical and strategic areas can now be improved. The first step towards P2P automation is deciding which processes can be automated. At this point, our How to do Workflow Process Mapping post will help you understand which processes to choose and how to map them.

Example of a simple accounts payable process map for mapping your workflows. From receipt of invoice to payment. The first step towards P2P automation.

Example of a simple accounts payable process map.

Let’s look at the P2P process that you can optimize…

Vendor management

Having a preferred list of vendors is an important but time-consuming task. Manually screening each vendor can take several weeks.

Automated P2P collects and evaluates RFQs and/or RFIs. A verification check is performed in which information is compared with predefined rules. 

Purchase requisition

It takes an age to manually check every single purchase requisition for compliance with your internal policies. 

Standardizing and automating how purchase requisitions are submitted will save a huge amount of time. Corrections, a centralized hub of information, and recognized approvers speeds up the process. Purchase requests will be validated by cross-checking data with preset rules. Automatically rejecting requests that fall short.

Purchase order

Purchase requisition approved, your purchase order is created automatically. Linked to the purchase requisition and approval, it’ll be submitted to your vendor via your P2P automation software.

Automation will not only create the PO. It’ll also generate contracts, send purchase orders, update stakeholders, and process payments.

Invoice approval

Potentially, depending on the invoice total, there can be several levels of approval, right up to C-level. Having a people-heavy process means getting invoices approved can take time. A regular large volume of invoices multiplies this time.

Sending approvals automatically to the relevant approvers, with reminders when the process sticks, means you’ll receive approval faster.

Receiving goods or services

When you receive the goods, you update your P2P system, which is integrated with your accounting or ERP system. Receipts, goods received notes – GRN, packing lists, and shipping documents are linked with the purchase order and invoice for matching.

Accounts payable

A cloud-native AP automation software processes your invoices, archives digital copies of documents, matches invoices with POs, and recognizes exceptions.

Information is automatically verified and payment can be made.

Check out our 11 Tips for Automating the End-to-end Process of Accounts Payable.

Challenges when introducing P2P automation

As humans, we’re often resistant to change. “If it ain’t broke don’t fix it.” “It won’t work with our current tech stack.”

Introducing new software, even if it is going to improve your business processes, can meet objections. Best be ready to tackle…

Poor integration with existing tech stack

When choosing your automation solution, it’s vital that it integrates with your existing ERP or accounting software. A document processing platform with pre-built integrations or offering the ability to customize will eliminate any compatibility issues. Involve your IT team in discussions about which solution to go with.

Resistance to change

Yep, even though you’ll be improving business processes and making your team’s life easier, there will be resistance. Whether it’s being set in their ways or the fear that their job will be redundant, this reluctance should be addressed.

Talk with people. Explain the many benefits of P2P automation. How it will simplify processes, save money, and increase efficiency. And… how it will remove boring, repetitive tasks from their days. How they’ll be able to spend more time on creative tasks.Check out our recent eBook – The Cost of Doing Nothing – that looks at how sticking with manual document processing will stunt the growth of your business, increase employee churn, and reduce productivity and revenue.

Cost of doing nothing framework. If you don't automate your procure-to-pay processes you be less productive and spend more money.

The cost of doing nothing framework – invoice processing.
Total AP team expense/Total number of invoices processed = cost per invoice.

Data migration

This is a crucial question you must ask when choosing an intelligent document processing solution – can you import my historical data from my old system to my new P2P automation platform?

Ask how it’ll work. What they need from you. And, get your IT team onboard.

Training

It can be daunting learning a new technology. Your team is bound to be nervous. To ensure that adoption is frictionless, you’ll need to work with your P2P automation vendor and create a training plan to onboard your team.

How to choose the best P2P automation software solution

There are several automation solutions on the market. From the cheaper basic solutions to full blown intelligent document processing powered by AI. Your choice of software will depend on your business needs. Which processes do you want to automate – some or all?

You should look for a cloud-native solution. Full and seamless integration with your existing tech stack that won’t interrupt your business processes, along with integrations of their own. 

For instance, Rossum brings SAP, Coupa, Sage, and more to the table.

If your business is growing, so is the volume of paperwork you’re dealing with. You’ll want a solution that’s scalable.

Target P2P automation solutions that’ll help both your procurement and your AP team to scale their processes. Features should include…

  • Ergonomic user interface – a user-friendly UI will help your team onboard and start seeing the benefits fast.
  • Low code, template free, document agnostic – to save having to rope in your IT team for every upgrade, ensure the solution is low code. Template free and document agnostic means it can read any document, regardless of style changes.
  • Scalability – for future demands as your business grows and the volume of documents you have to handle increases, the P2P must scale with your growth.
  • Total cost of ownership – consider software licenses, implementation, onboarding, upgrades, and customer support. 
  • Reports and dashboards – access to analyzable data is a must, with built-in reporting and dashboards to view key metrics, spot trends and identify document processing optimization insights.
  • Vendor roadmap – What are their long-term development plans? New features? Important questions so you know whether the vendor will meet your future needs.

Automate your P2P process with Rossum

Manual invoice processing is error-prone. Lost receipts and purchase orders, late deliveries, out-of-policy spends, missed early payment bonuses and poor visibility of spend. 

An automated P2P solution like Rossum is able to automate your P2P process end to end. Matching invoices against predefined rules, purchase orders, and goods receipt notes. 

Automating your purchase-to-pay processes frees up your procurement department and AP team to work on increasing your bottom line.

P2P automation FAQs

How can I optimize my P2P process?

To optimize your P2P process start by performing an audit of your current process. Identify the areas that need improvement. Sticking points. Automate some of all of your processes for a streamlined process between your procurement team and accounts payable. Continue to measure and track so you can improve and scale over time.

What is P2P automation?

Procure-to-pay software automation is the practice of using software to integrate the purchasing and accounts payable processes. Eliminating repetitive, time-consuming manual tasks in your business’ P2P process. Increasing efficiency, saving time, and lowering costs.

How do you automate P2P?

Businesses can automate their P2P process using artificial intelligence (AI), robotic process automation (RPA), natural language processing (NLP), computer vision, machine learning, e-invoicing, optical character recognition (OCR), and more. Your automated P2P process can then be integrated with your existing ERP system.

What are the benefits of P2P automation benefits?

Automating your procure-to-pay process will increase productivity. Reduce errors due to manual data entry. Your approval process will be streamlined. Supplier relationships will be strengthened as payments will be prompt. And, you’ll save a ton of money.

Automate your P2P processes

The P2P process is time-consuming, labor-intensive, repetitive, and… critical. Which begs the question, why isn’t it automated as standard?