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Procure to Pay Implementation & Challenges

The procure-to-pay (P2P) process combines a company’s procurement and accounts payable functions. The process starts when the need arises for goods or services and ends with the payment for those goods or services. 

Implementing a procure-to-pay solution within your organisation can deliver a number of benefits, including saving time, money and resources, while optimising transparency and productivity. However, it can pose some challenges. By following best practice, and developing an effective, efficient, and achievable implementation, it is possible to overcome these potential barriers. 

Find out more about the procure-to-pay process here.

BUILDING A BUSINESS CASE

BUILDING A BUSINESS CASE FOR PROCURE-TO-PAY AUTOMATION

The successful implementation of a procure-to-pay solution depends on having the support of all relevant stakeholders. To build a case for P2P automation, you’ll need to present a business case that demonstrates the benefits and possible outcomes of the project. This should include the following:

The Current Scenario

The first step is looking at the current costs involved in the P2P process. What is the time and cost involved to perform each task within the procure-to-pay lifecycle.

Procurement costs

With a manual procurement process, significant time and money is spent in handling tasks such as new vendor onboarding, generating and approving requisitions, issuing purchase orders, and keeping track of spend overall. The longer it takes to perform each task in the purchasing lifecycle, the more costly the overall process is to the organisation.

AP costs

Equally, from an accounts payable (AP) perspective, a manual invoice receipt and approval process could result in lengthy processing cycles and significant processing costs. Manual AP processes can also impact on the company’s ability to pay on time, putting strain on supplier relationships and missing out on early payment discounts.

The Future Scenario

Once you’ve established the current costs and issues, highlight the potential benefits and savings that an automated P2P solution could provide. Benefits include:

  • Streamlined processes
  • Reduced costs
  • Increased transparency
  • Reduced risk
  • Improved relationships

Present an Implementation Plan

Create and present an implementation plan highlighting how the P2P transformation will work in practice, including a roadmap, goals and costs.

PROCURE TO PAY BEST PRACTICES

Following these best practices will ensure that your P2P solution is effective and efficient:

  • Implement an automated software solution to maximise productivity, accuracy, and cost savings
  • Standardise the process from start to finish
  • Collect and analyse key data to establish goals
  • Ensure the process is transparent and traceable
  • Optimise supplier engagement and satisfaction
  • Optimise inventory
  • Streamline the contract management process

Download our comprehensive, procure-to-pay best practice guidelines here.

IMPLEMENTING A P2P SOLUTION

Effective implementation is crucial for the success of your procure-to-pay solution. Key factors to consider during implementation include:

Secure executive support

Executive buy-in for your project is absolutely crucial.

Choose the right system

The first step in successfully automating your procure-to-pay processes is to choose the solution. There are a range of different solutions to choose from so it’s important to choose the one that best fits your needs and can seamlessly integrate with your existing ERP and other financial systems.

Choose the right partner

As well as the right system, you’ll also need to select the right partner. Think about the level of input and ongoing support you’ll need and the areas of expertise your partner will deliver.

Establish goals

Set clear goals for your project as well as KPIs to enable you to measure its success.

Get your team onboard 

Bring together a team to work on the implementation of the procure-to-pay system. Ensure that the team reflects on the company-wide nature of the project.

Make a deployment plan

Before you start the implementation process, it’s vital that you create a plan. This is the only way to ensure success. There are several different methods of implementation, however we recommend pilot implementation. This approach starts small with lots of smaller milestones that build towards the end goal.

Consider suppliers

Remember your suppliers will use your solution, too. Consider how you will communicate the new solution and the benefits of adopting it to your suppliers.

Cleanse supplier data

This can be a lengthy process but it’s well worth the time investment. Ensure that only accurate, quality supplier data is input into the new system.

Avoid customisation

Customisation isn’t best practice when it comes to procure-to-pay solutions. When implementing P2P, try to avoid customisation wherever possible.

Prepare a change management plan

Change management should be led internally. It’s important to develop an effective, responsive change management plan that takes into account the company’s culture, ethos, and workforce.

Find out more about implementing procure to pay within your business here.

PROCURE TO PAY RISKS AND CHALLENGES

Along with its many benefits, the procure-to-pay process can also pose certain risks including:

Unifying Processes

Within an organisation, different departments usually have their own tools and systems. This can make consolidating data across the business challenging. Failing to unify systems and processes can result in inefficiencies and errors.

Achieving Compliance

Ensuring that all employees and parties comply with the new system and processes can also be challenging. Often, procurement processes are seen as inflexible and bureaucratic, leading to non-compliance.

HOW TO CONDUCT A PROCURE TO PAY INTERNAL AUDIT

Set Your Audit Goals

Before starting the audit, it’s important to outline the aims of the process. What are you hoping to learn from the audit? What information will you need to analyse? Setting clear aims will ensure the process is efficient, effective, and successful. 

Evaluate Your Supplier Processes

The procurement process doesn’t just involve your internal procurement team, you’ll also be working closely with suppliers.

As part of the audit process, look at how you are selecting suppliers and making collaboration as efficient as possible.

P2P IMPLEMENTATION FAQS

How long does it take to implement a Procure-to-Pay solution?

The amount of time it takes to implement a procure-to-pay solution depends on a wide range of factors, including the size of the organisation, the current set-up, and the complexity of the new system. It’s important to allow plenty of time for the implementation process to reduce the risk of problems and issues.

What size of busines benefits from Procure-to-Pay software?

Organisations of all sizes can benefit from procure-to-pay software. However, the larger the organisation and the more transactions that take place, the greater the cost savings and time savings are likely to be.

Do I need internal personnel to be responsible for the maintenance of the Procure to Pay process?

The procure-to-pay solution can be maintained in house or by your provider. It’s important to consider the level of maintenance that will be required and establish the most efficient and cost-effective maintenance option.

Do I need a Procure-to-Pay backup solution?

Your digital P2P solution will usually be backed up on the cloud to protect against loss of data and the risk of system downtime. Again, it’s important to discuss this with your provider.

Summary

As well as offering a host of potential benefits, implementing a procure-to-pay process within your organisation can pose risks and challenges. However, by following best practices and developing an effective, efficient, and achievable implementation, it is possible to overcome these potential barriers.

To find out more about the procure-to-pay solutions, the benefits they can offer, and the potential barriers to their implementation, explore our P2P transformation guides:

Procure-to-Pay Solutions

Procure to Pay process
explained

Learn more

Source-to-Pay Solutions

Procure to pay vs purchase to pay vs source to pay

Learn more