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Modern accounts payable teams are taking advantage of automated procure-to-pay tools. This type of payment functionality empowers finance teams to quickly and accurately close out invoices by allowing them to instantly process virtual payments directly from an established enterprise resource planning (ERP) platform to an appropriate vendor.
Many companies have paper checking structures and manual payment flows that have outlived nearly every other process in their accounts payable office. This is due to traditional payment methods being familiar, universally accepted, and providing a desirable paper trail. However, as technology, efficiency, and security have all come a long way in complexity, the opportunity costs of keeping the status quo have never been higher.
Is your company leveraging the power of direct virtual payments? It is more efficient than traditional manual payments and can earn you additional income through rebates.
What is Procure-to-Pay Software?
Think of procurement software as the completion and final leg of the procure-to-pay cycle. A robust virtual payment solution replaces time-consuming manual processes with direct payment to vendors from virtual cards, eliminating the typical inefficiencies in manual cash flow and increasing transparency by matching electronic invoicing with e-payments. This drives down operational costs, captures discounts and rebates, and provides protection from fraud.
Other companies recognize these benefits and are adjusting accordingly. A recent Gartner report claims that by 2025, more than 50% of organizations around the world will have a cloud-based pay suite in place. This rapid movement in the space means that vendors are well aware of the shifting expectations from their customers and are more prepared than ever to oblige virtual payment requests.
Perks of Sourcing Payment Processes from an ERP
Having procurement-to-pay capabilities provides a suite of benefits. Let’s review some of those.
From Requisition to Purchase Order
Procure-to-pay bridges the final step in the back-office process and provides critical supply analytics for better decision-making and enhancement in supplier relationships. Sourcing payments directly from an ERP system consolidates more business processes under a single system and increases the control of your procurement team.
Payment automation gives end-to-end visibility in supply chain management and the e-procurement process. A robust and complete P2P process optimizes workflow, enhances contract management, and provides full, real-time visibility into the purchasing process, beginning from purchase requisition to e-invoicing, invoice approval, and payable processes in your analytics.
Pay Software Brings Automation to Spend Management
A procure-to-pay solution gives managers the ability to lead payment-related initiatives holistically, accounting for and gauging several time-sensitive compliance factors all at once. This allows them to further ensure alignment between procurement and finance incentives.
For example, using payment software in procurement can enable teams to quickly identify the cheapest prices for products while cross-examining them with your company’s preferred list of vendors who accept virtual card payments and can allow you to cushion your business line budgets through generating rebates.
Purchase-to-Pay Solutions Mitigate Fraud
A P2P cycle enhanced by automated payment software empowers back-office teams to leverage fraud protection benefits on multiple levels. It also provides greater accuracy and transparency through three-way matching, which can cross-reference goods receipts to invoices and the initial purchase order or purchase request.
An automated purchase-to-pay solution can act as a hedge for your company from potential fraud. This is accomplished by sealing up exposures to risk in payment file transfers. Procurement software makes it so the invoice processing is tightened together by eliminating the time a purchase order can sit waiting to be transferred between systems and exposing it to risks of being tampered with at several stages.
Through a payment solution, companies can outsource vendor enablement and use the software to find the best payment option for each specific vendor. Once identified, a supplier’s or vendor’s payment information can be validated and checked through the software’s vendor onboarding procedure before a transaction is ever placed.
E-payment capabilities also automate strict compliance measures in the payment process which will reduce maverick spending across your organization.
Impact the Bottom Line
Companies that cling to paper and manual payment flows are not only more inefficient than their competitors, but they’re likely missing out on opportunities for discount capture and increased business capacity.
E-payments allow your teams to turn a finance department into a profit-saving hub by empowering them to leverage rebates offered through the companies’ virtual credit cards.
According to a recent Gartner study, procurement departments using a procure-to-pay system can save a company 30% year-over-year on goods and services costs by directly sourcing network price benchmarking and discounts. These savings are worth thousands of dollars and reinforce an AP product’s ability to pay for itself quickly.
Streamline Vendor Payment Discounts for Cost Savings
Handwritten and physical checks create timeline bottlenecks right at the end of an invoice’s lifespan. Procure-to-pay enables companies to maximize the capture of early payment vendor discount capture by shortening the life of open invoices through virtual credit card transactions. Accounts payable software can help procurement teams easily identify invoices eligible for a discount, which then can be earmarked as priority payments, fast-tracked, and paid immediately after approval.
PairSoft: Your Full Procure-to-Pay Solution
PairSoft’s accounts payable automation software improves control and compliance over the invoice handling process and optimizes all elements of the payments process. From supplier onboarding to selection of payment type, payment refunds, change requests, and supplier inquiries, PairSoft’s payment automation solution shortens invoice cycles, reduces transaction costs, and increases the capture of discounts and rebates.
Get a demo today.