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Here are Susie's top ten KPIs which, if you monitor accurately, should tell you the level of excellence and impactfulness of your purchase-to-pay organisation.
Purchase to pay is a complex part of the organisation, with multiple steps and crossing many business functions. Running it badly can have such wide ramifications for the business, and running it elegantly can prove incredibly powerful.
Manual purchasing and payment processes are time consuming and the margin for error can be huge. If orders are made over the phone without a reference code or a purchase order to identify them as legitimate, disputes with suppliers can easily arise. Similarly, it is extremely difficult to keep tabs on spending, which can cause cash flow problems and put financial commitments at risk.
With well-managed, standardised processes, and the wide adoption of purchase to pay technology solutions, businesses can enjoy full visibility of the end-to-end transaction in a complete, automated, clean, accurate, timely, and inexpensive way.
This allows companies to see how items are being ordered, who is ordering them, how much is being spent, and which suppliers are being used. This information alone can allow procurement to improve on their contract positions.
A high first time match rate is evidence of a good purchase to pay process. This is when the invoice that comes in for payment matches with the purchase order and, if needed, the goods receipt note, in the first instance. Companies that manage a manual purchase to pay process can enjoy a high first time match rate. But when a company adopt electronic invoicing it can see this process translate into a touchless process, which is what most shared services organisation aim for.
At sharedserviceslink.com we can help you make your purchase to pay ventures a success. We'll assist you in all areas of your project, from selecting the right kind of technology partners to enrolling suppliers in your e-invoicing programme, and understanding the critical factors that will make your e-invoicing initiative flourish. We organise interactive conferences for shared services professionals and we provide a wealth of online resources, including white papers and reports, video interviews, newsletters and presentations.
The benefits of procure to pay
Purchase to pay solutions give businesses a shared and view of goods and services ordered, received and paid for in real time. This increased visibility is one of the major benefits of the technology and can eliminate all manner of problems, such as disputes with suppliers, late payment and overspending. It can also give companies a better idea of their overall budget position
Having a single, seamless and paperless automated workflow process for purchases and payment can lead to greater efficiency too. Purchase to pay solutions removes the need to chase paper across departments, which could be particularly advantageous within a multi-location organisation and will save valuable time that can be spent on value-added activities.
It is generally assumed that an invoice that does not match first time cost the business fifteen times more that a ‘good’ invoice. And then if you automate a good invoice, costs are really being driven down. The combination of change management initiatives to ensure all users in the purchase to pay process follow the process rules, coupled with adoption of technology, can have a very positive impact on the business.
Speed is another benefit of purchase to pay improvements. Without having to spend time investigating ‘bad’ invoices, you can see an invoice costing the business less than €1 to process.
Common purchase to pay problems
The two key areas that should be cracked in purchase to pay is the user-impact and technology. The process user can me procurement, the site person, the supplier and the accounts payable clerk. To ensure all these users are compliant with the process rules requires proper planning and communication.
Secondly the adoption of technology needs to be done in a way that will serve the desired process, and IT don’t always understand this.
Make the most of purchase to pay with sharedserviceslink.com
Growing numbers of businesses are improving their purchase to pay process through enforcing user compliancy and rolling out enabling technologies. At sharedserviceslink.com we can help you overcome any barriers you may face and realise the full benefits of the technology.
We can assist you in every step of your purchase to pay ventures to make sure you meet chief key performance indicators such as cost per invoice, payment on time metrics and first-time match rates. We provide you with informative online resources such as white papers and reports, monthly webinars on purchase to pay, video, interviews, newsletters and presentations and we also organise interactive conferences featuring key shared services industry speakers with extensive knowledge in procure to pay processes.
It is free to join sharedserviceslink.com. Simply complete our online member registration form to receive ten issues of our newsletter and free access to our downloadable content and archive of presentations. To find out more about purchase to pay and how it can help your organisation, or to ask about our conferences, webinars and online resources, just get in touch with us today.
Webinar 18.06.2013 Register
Webinar 27.06.2013 Register
White paper & report03.05.2013
White paper & report19.04.2013
White paper & report07.03.2013
White paper & report28.02.2013
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