Procure to pay (P2P) might be getting a new name…PN2P or procure network to pay. Learn about the value of the network in your P2P process.
If you’re reading this, chances are you’re pretty familiar with the term “procure to pay” or P2P as it’s commonly referred to. Hopefully, yours is automated end-to-end, but if it’s not – well that’s a very different discussion. (If you want to learn the value of total P2P automation, try reading this blog or maybe even this one here.)
P2P has been the common reference for some time now, though it has surely gone through some changes over the years. And although change can be a little intimidating, it’s almost always necessary. Especially when it comes to redefining (or rather renaming) procure to pay.
My suggestion – and ours here at Basware – is to redefine P2P and instead call it PN2P. Procure, network, to pay.
You see, the value of an open commerce network is vital to successful business functions and there are unfortunately many P2P vendors out there that are telling customers and potential customers that their network is just this.
It’s not truly a network…
Many have enabled suppliers to flip a PO in an e-mail to an invoice and are calling that a network in order to compete with larger providers who have built extensive business networks over years. They tend to emphasise e-invoicing as a way to mature your business processes and capture more invoices, and that’s a great goal to work toward, but it’s not realistic that you will achieve 100% e-invoicing right off the bat (or ever). Your suppliers have various levels of sophistication and will not all be able to send e-invoices.
A real network offers a variety of solutions, so your suppliers easily connect and send you invoices however is best for them and the network automatically converts those invoices to true e-invoices. You should not have to adjust your strategy and goals or lose suppliers to make up for lacking functionality on the provider side.
How a network should be
For P2P leaders, establishing an effective and comprehensive network that offers a variety of solutions makes it easy for suppliers to connect and send invoices – in whatever format works best for them. This network then converts the invoices to e-invoices, giving clients full functionality to optimise both time and money.
And while savings are certainly important for businesses, it’s also important to their suppliers. The network can only deliver optimal value if it’s kept free for suppliers. Ensuring that your suppliers are connected is critical to your ROI, which is why the Basware Network is free and easy to join. Not only for your large, strategic suppliers but also your mid-sized and long-tail suppliers. This is important to make sure your suppliers do not pass any joining costs back to you.
Below are the benefits you should never sacrifice when vetting P2P vendors and their networks. With their network, you should be able to:
Increase collaboration with suppliers
Speed up the purchasing process by enabling suppliers to provide electronic catalogs
Allow suppliers to receive purchase orders, confirm, and manage changes to orders electronically
Speed up the accounts payable process and reduce costs by offering your suppliers options to send invoices electronically (XML, email, portal, paper)
Decrease business costs by allowing suppliers to maintain their own information
Also, you want a network that delivers the most value and that is an open, free network for your suppliers. Connecting your suppliers is critical to your ROI and the best way to do that is to ensure that it’s free an easy for them to join. It should be free for your large, strategic suppliers, mid-sized suppliers, all the way down to your long-tail suppliers. If suppliers have to pay just to send you an invoice, you can bet many will not comply or they will pass the costs on to you.
So, the answer is clear. The network you use makes a huge difference in your operations and shouldn’t be overlooked when it comes to your procure-to-pay processes.