A business must go through several phases in a typical procure-to-pay (P2P) cycle in order to execute a transaction. Often, different stages of this cycle run throughout the day, every day, in large corporations. For large corporations, the procurement cycle is an essential source of information and entails a wide range of tasks. When organisations expand and function at a larger scale, they need sophisticated solutions that often come in an ERP platform, such as SAP to manage the P2P cycle since there are so many moving components and so much data to reconcile on a regular basis.
Although SAP offers unequaled flexibility and capacity for managing P2P cycle components, automation helps in modernizing the platform’s core capabilities to ensure complete digitalization for improved success and savings.
Let’s look at the fundamental processes in a modern P2P cycle, the inefficiencies, and how cutting-edge, AI-powered automation solutions can work and be integrated with top ERP systems like SAP for efficiency.
What is the Procure-to-Pay Process in SAP and Why Should You Automate it?
A business must go through different phases in a typical P2P cycle in order to execute a transaction that is usually complex. The cycle includes purchase requisition, purchase order, order confirmation, goods receipt, and invoice payment. These processes have to go through several staff approvals across departments.
SAP provides solutions for a few stages in this P2P cycle, but the entire procurement process is not taken into account and some processes may be paper-based. Separate workflows are not integrated into SAP to deliver a complete end-to-end process. Hence there’s a need to invest in an intelligent automation solution that optimizes the entire P2P cycle in the SAP system.
Traditional P2P Process in SAP
Businesses face several challenges as SAP offers solutions only for a few phases of the P2P cycle and it is not mapped end-to-end.
Functions of Automated Procure-to-Process in SAP
With intelligent automation solutions, partial-paper-based workflows are also transformed into fully automated workflows that produce clear and efficient results. The whole process, from the PO to receipt of the invoice, is integrated into the SAP system.
A purchase requisition generated by SAP is used to coordinate and report on the need for goods, and it is then automatically forwarded to the responsible processor who places the order with the appropriate supplier in accordance with the terms that have been agreed upon.
Once an order has been placed based on the purchase requisition, order confirmation, and the purchase order data are automatically matched which helps in preventing manual verification processes and eliminating errors. Further approvals and verifications are automated and monitored in real-time.
Processing Goods Receipts
Immediately following the delivery of the goods, the goods receipt data is automatically captured and matched with the confirmation of the underlying order. SAP provides real-time information on incoming items, and all variances and subsequent processes are accelerated.
The P2P process comes to a close with the SAP invoicing workflow. With OCR technology invoices are extracted, filed, and automatically compared to relevant process documentation and SAP benchmarks. Later the invoices are delegated to those responsible people for approval and verification in SAP.
Documents relevant to each process are archived in a legally compliant manner throughout the entire P2P process. This enables the tracking of the end-to-end process which helps every department in planning their activities to make smarter decisions, ensuring that vital business processes are not hampered.
Automate the Procure-to-Pay Process in Your SAP System
With Bautomate, businesses can streamline their P2P workflows, enhance accuracy, and boost overall productivity, by harnessing the power of automation within the SAP system.
We will delve into the benefits of automating P2P workflows in SAP for organizations looking to effectively implement automation solutions to drive operational excellence.
- Take advantage of early payment discounts and avoid late payment penalties.
- Gain 100% visibility on all procurement processes in SAP.
- Automated auditable archiving of all critical information, including purchase requisitions, approvals, and POs in compliance with regulatory standards.
- An automated system cuts purchasing process costs by 30% on average.
Streamlined workflows, timely payments, and reduced discrepancies contribute to better relationships with suppliers, leading to improved collaboration and business success. Sign up for a demo to know more about the automation of the P2P process in SAP