4 Benefits of Outsourcing Procure to Pay (P2P)
Is your business facing long purchase cycles, delayed payments, and sluggish cash flow? Maybe it’s time to streamline the procure to pay (P2P) process of your business.
The P2P process starts with planning out the requirement of a service or product and ends with the payment for that service or product. Particularly in the financial services industry, P2P is used to facilitate the core business operations. By efficiently managing this process, your business can significantly improve its return on operating costs.
The global procure to pay outsourcing market is likely to grow nearly 16% by 2020
A survey by market research company Technavio found the “global procure to pay outsourcing market is likely to grow nearly 16% by 2020.” This is an indicator that an increasing number of companies are opting for P2P outsourcing to drive greater efficiency.
Why Procure to Pay (P2P) is Critical for Your Business
The procure to pay process connects the procurement and finance functions. The major responsibilities of the procurement department are to find an ideal service provider, negotiate contracts, minimize spending, and identify scopes to automate the purchasing cycle.
However, the financial services industry, for example, is facing some major challenges in the P2P space. Such things include outdated procure to pay processes, extensive paperwork, lack of compliance, difficulty in keeping up with organizational changes, and low usability of the existing system.
By outsourcing the P2P process, your organization can reduce paperwork, cut down on cycle times, increase compliance, and improve the overall purchasing experience.
Benefits of P2P Outsourcing
To bring down operational costs and increase efficiency, the financial services industry is focused on automation. A study by the Tungsten Network Global Study reveals manual procure to pay processes as inefficient and complex. This is due to issues like high invoice volumes, manual approvals, exceptions, and supplier requests. The study goes on to show more than 125 hours and $171,340 are wasted every year due to manual procure to pay issues. Manual invoicing usually leads to delays and is error-prone. Automating the P2P process under one system helps reduce errors and improve efficiency.
In the financial service industry, procurement has always been done using an in-house P2P web portal or via e-forms. However, an increasing number of users are expecting mobility and flexibility. Keeping this in mind, organizations are working to provide easy access. There is a focus on developing websites or mobile apps that are not device specific. Such ‘anytime-anywhere’ access has enhanced the procurement experience while reducing the turnaround time for requests.
Organizations are taking a modern approach to designing and developing procurement solutions. User-friendly features are being integrated in a move away from complex and ambiguous procurement solutions. Leading P2P service providers can provide further intuitive and responsive user experiences through effective procurement initiatives.
Outsourcing key P2P tasks allows a business to maintain tighter control over the system, save costs, and eliminate non-value added activities (NVAs). P2P outsourcing solutions help reduce transactional costs by optimizing processes. In addition, the iterations that usually crop up due to manual processing are cut down and further cut costs.
Procure to pay solutions help organizations reduce their supply chain risks and costs by integrating advanced analytical solutions in the procurement process. Leading service providers are using advanced systems in procurement planning for a more accurate and secure process.
Do you have questions about procure to pay services? To have complete control over the life-cycle of a transaction and improve cash flow, consult our experts at firstname.lastname@example.org or +1-408-913-9130.