Procure to pay better known as p2p is the process of procuring and managing the raw materials from your suppliers needed for manufacturing a product or providing a service for the payment made to these suppliers for the raw materials supplied. A p2p software can automate the whole process and thus help save time.
It involves flow of data from the manufacturer’s end about the raw material required, quantity of raw material required and the date by which raw material is expected to reach the manufacturer. The supplier, on receiving this data, acts on the order to be delivered to the manufacturer and on fulfilment of the order, insists for the payment of the product or service. The whole process might seem simple if your organization is dealing with a couple of raw materials but imagine a FMCG company which manufactures as many as 20-30 products on a daily basis requiring hundreds of raw materials on a day to day basis. The process gets complicated here and hence automation of the entire process in the form of software is required.
The goal of p2p software system is to transform the time consuming process which involves a lot of paper work to an automated and efficient process which is paper free. The software can be tailored as per your needs. For instance, if your requirements are similar everyday then the software can be pre programmed and an email will be sent to your supplier regarding your requirements on daily basis. Similarly, the software can be tailored according to your budget needs so that you don’t cross the buying limits. The software quickly makes a cross reference to your buying limits before placing an order to ensure your budget is in place.
Advanced p2p software is capable of extracting invoice and payment data from a ledger and other systems like Enterprise Resource Planning and Customer Relationship Management and even from banks and vendors. It helps converting complex and multiple supplier statements to payment and goods received.
However implementing such a system requires significant knowledge about the current as well as future business processes and should be flexible enough to be adapted by the future business processes as well.
It is thus advised to invest in this software as in the long run when your business expands and procurement process becomes complicated p2p software will aid you to simplify the process.