Digital transformation of purchase to pay
Purchase to pay typically involves multiple fragmented processes and dealing with unstructured documents and files. Due to a lack of insight in (tail) spend, it is unknown how much cash leaves the company at any given time. This results in too much working capital. With an intelligent, data-driven purchase to pay system, much more control is attained on company spend.

Supply chain integration
The digital transformation of the purchase to pay process goes hand in hand with integration of the external and internal supply chain. Preferred suppliers are selected and contracted, including tail spend. For each purchase a PO is created and conveyed to budget holders for approval. The invoice that follows is automatically matched with the corresponding PO. Accounts payable merely has to follow-up on errors. Based on overall performance, purchase prices and discounts on early payment can be negotiated with preferred suppliers.

Benefits of purchase to pay automation
-
Reduce operational costs
By automating procurement (for indirect spend) and invoice processing (for both direct and indirect spend), the operational costs of these processes can be reduced.
Automation of the p2p process often starts with the accounts payable administration. The process of manually receiving invoices, coding, validating, having them approved by budget holders and making payment can be replaced by an automatic process.
In this process, invoices are automatically sent to budget holders, who can approve (or reject) the invoices behind a laptop or with their mobile phone, after which the invoice is made available for payment. When purchasing is also standardized and data-driven, approval can even be performed automatically. After all, the invoice does not need to be manually approved if it corresponds to an order or contract that has been approved.
-
Improve agreements with suppliers
Negotiate lower purchase prices
When insight, and therefore control, is obtained on order and invoice flows, it is possible to critically examine how these flows relate to suppliers. This will be clear for direct spend, but for the long-tail to suppliers where items for the maintenance of business premises, office equipment and marketing material are purchased, the challenge is greater. When orders and invoices are managed systematically, it becomes possible. The supplier base can be rationalized and price and delivery agreements can be made with preferred suppliers.
Take advantage of early payment discount
By automating invoice receipt and invoice processing, the lead time is shortened and a supplier can be paid faster. That, of course, calls for a reward. A large proportion of companies in the Netherlands suffer from invoices that are paid late. To encourage customers to pay earlier, many suppliers offer discounts on early payment of invoices. A payment discount of 1 percent is not uncommon; 2 percent is also a regular occurrence. This may not seem like much, but the savings can add up. Research by Forrester shows that companies with an annual spend of 300 million euros over a period of three years miss an average of 400,000 euros in payment discounts. That makes a business case for purchase to pay automation a lot stronger.
-
Prevent invoice fraud
A PDF or XML invoice goes through various e-mail servers of which only about 50% is encrypted. On any other server, criminals can intercept invoices, adjust them with their own bank account numbers, and forward them. Via address spoofing it is even possible to send an e-mail on behalf of someone else. Criminals can also throw a phantom invoice into the market, the value of which is only a few hundred euros, so that little manual control takes place at the recipients and is often paid automatically. Companies and institutions can prevent this with automated control mechanisms on XML invoices (or paper or PDF invoices that have been converted to XML). The content of an XML invoice is then compared with the supplier data as known to the customer. If the combination of name, VAT number and IBAN on the invoice does not match the data in the system, an invoice sent by criminals with a modified IBAN is automatically canceled.
-
Strengthen CSR position
By paying suppliers on time and thwarting fraudsters, you are already showing good behavior. And it is obvious that data-driven working counteracts the use of paper. But data-driven working also provides transparency and traceability of activities.
Purchase to pay software
A digital transformation is a gradual process that requires continuous adjustment. For this reason it is important to apply automation software that can both support a company's ambitions and adapt to changing circumstances. The software must seamlessly connect purchasing and invoice processing. It has to interface with one or multiple ERP systems and administrations. And it must be able to provide insight into purchase orders and invoices that are being processed or have been processed, in order to continuously improve the purchase to pay process.

E-invoicing and invoice processing
An automatic invoice receipt and recognition process (e-invoicing) will replace the manual / semi-automated scan and capture process that involves PDF invoices. The deployment of e-invoicing networks will leverage the transition. Once the invoice information is available as data, invoice processing (coding and matching) can be performed automatically. The degree of automation is further maximized if coding and matching is preceded by data validation with ERP master data.

Decentralised, but regulated purchasing
Contrary to spend that serves a company's primary activity, there is much less control on spend that serves secondary activities. To reduce this unmanaged, tail spend, preferred suppliers should be selected and contracted. Next, by offering their products and services via a corporate web shop to the organization, control on spend is gained, operational purchasing costs are reduced, and invoice processing can be fully automated.

Disclaimer | Privacy | General Terms | Terms of Cloud Service
© ICreative
Contact
+31 (0) 318 49 31 50
Oortlaan 2
6716WD, Ede
The Netherlands