Purchase to Pay (P2P) Overview

Compleat Purchase to Pay browser software enables organisations to take a strategic approach to automating the way that the business spends money, delivering significant productivity improvements, 100% automated budget control and more timely and accurate management information and cashflow reports.

Purchase to Pay automation is the foundation stone of Spend Control, enabling organisations to save money by simply paying less for what they already purchase.

Manual Purchasing Pain Points
All organisations recognise the tactical pain points of a manual purchasing system:

• Purchase invoice approval bottlenecks.
• Lack of information about what is being spent until after the purchase invoice is approved.
• Over budget spend because the manual processes fail.
• Lack of control over the spending habits of the staff resulting in large numbers of suppliers.
• The lack of visibility for every purchasing transaction, unless you have the relevant piece of paper in your hand.
• The huge amount of time spent across the organisation on purely administrative processes such as raising requisitions, purchase order approvals, deliveries, purchase invoice capture and approval, general ledger coding and posting to the ledgers.

Whilst there are some tactical software applications that deal with each of these challenges, Compleat Purchase to Pay is unique in that it addresses all of them, delivering a single seamless, paperless process that improves productivity and delivers Spend Control.

 

Purchase to Pay Automation
Consider the impact on the productivity and efficiency of the entire organisation if the current laborious and paper intensive purchasing process was replaced with a fully automated and electronic process.

Compleat Purchase to Pay automation is unique because it both captures the purchasing information AND automatically generates the associated financial accounting information during the creation of a request to purchase – the very beginning of a purchasing transaction.

Automated “Dynamic” Workflows
Compleat is designed to automate even the most complex workflows and approval processes, removing the need for the user to take any action, whether based on the value of a purchase order, over budget requests, delivery and receipting or the purchase invoice approval process.

As each user completes their task, Compleat reviews the transaction profile and automatically forwards the transaction to the next individual or group for action (or just approves it). There is also the option to generate an email notification that there is an action required.

The result is the automatic implementation of a formal purchasing process where the desired corporate disciplines take place every time.

Purchase Requisitions
Compleat enables the control over which suppliers a specific user has access to and can limit the products and services they can access. It enables the organisation to control the spending habits of the business and consolidate spend to nominated suppliers, products and services to save money.

The extensive use of “Purchasing Templates” enables the software to automatically determine the relevant location, department and general ledgers codes for each line item on a transaction during creation. This is even easier when using pre-populated “catalogue” items.

This unique functionality delivers full commitment accounting, informing the finance department of the “soft” commitment at order requisition stage and the “hard” commitment the moment a formal purchase order is approved. Commitment accounting improves the accuracy and timeliness of both cashflow and management reports, as they are based on fact, not a month end estimated accrual.

Compleat P2P also fully automates the budget management process, enabling the approval process to dynamically change in the event that a proposed purchase order will exceed the available funds.

The user experience of creating a requisition is faster and easier than a manual process. Compleat (P2P) has also added the control over who they buy from, what they buy, the price they pay, the approval process, as well as automating budget control. The approved purchase order creates a purchasing commitment transaction and an electronic record that maintains the entire history of the transaction, which allows access by anyone that needs to know the exact current status.  Compare that to the current multi-part, hand written purchase order form.

Budget Control
Compleat enables budget management to become a very powerful tool to manage the expenditure of the business.

Every purchasing request is checked against the available budget at each step of the approval process. The calculation is based on the current budget held in the general ledger and includes commitments, accruals and general ledger expenditure for the relevant budget period.

Over budget requests can be simply refused, or escalated to more senior management based on the value and nominated overspend tolerances. Budget overspend becomes a decision and never a mistake and fully documents the decision making process.

Perhaps more importantly, any changes to the budgets held in the general ledger will instantly impact the ability to spend money at a very granular level. It delivers the senior management a very powerful tool to increase, slow down and if required, turn off corporate spend at will.

Compare that to the current manual budget management process running in each department and consider the value of automated budget control as a means of controlling spend on demand.

Delivery and Receipting
Delivery and receipting is optional and can be dependent on what is being purchased. The process can be as simple as a single keystroke to confirm that the delivery note matches the goods and services received. Compleat also addresses multiple deliveries, call off orders, part deliveries etc.

The value of introducing delivery and receipting is that it quantifies what has been received and potentially removes the need for manual intervention in the purchase approval process. If the delivery note and the purchase invoice matches the purchase order, then the “three way match” can allow the purchase invoice to be automatically approved.

Purchase Invoice Capture and Approval
Every organisation recognises the pain associated with a manual purchase invoice approval process. It is slow, paper intensive and often leads to delays in supplier payments that can result in critical services and supplies being delayed.

Compleat significantly reduces the time required to “capture” a purchase invoice. Simply enter the purchase order number and the relevant Compleat purchase transaction already knows who the supplier is, what was purchased, the relevant general ledger coding and even whether it has been delivered.

The user simply enters the specific invoice information: the invoice number, invoice date and value. If the information is correct and matches the delivery, the posting process is completed and the ledger updated.

If further approval is required, the transaction is sent by workflow to the appropriate approver(s) and can include a scanned image of the purchase invoice. The hard copy of the purchase invoice need never leave the accounts department. The approver can then approve or reject the purchase invoice, accessing the information from anywhere that is connected to the company network, or with appropriate authorisation, from anywhere with an internet connection.

The finance department, which can see and report on all outstanding purchase invoice approvals, can chase the individual responsible as well as identify those invoices under query.

The exact status of every purchase invoice approval is immediately available to everyone that has an interest. Once approved, the accounting software is automatically updated.

Compare that to the endless internal calls on the status of purchase invoices, the request for copies and the discussions with suppliers on why their account is so overdue.

Real Time Access to every purchasing transaction and its history
Manual purchasing processes have a huge, if “invisible” cost. It is the amount of time and effort of all the employees involved trying to find out the current status of a particular order. Has it been approved, has it been sent, has it been delivered, has the purchase invoice been approved and why has the supplier not been paid, because the account is on stop.

With Compleat P2P, all of the calls and emails stop. The reason is simply, anyone that needs to know the current status accesses the order in Compleat and they can see the entire history and the exact current status.

Compare that with the manual process. If you are not physically holding the document, then it takes a lot of time and effort to find out what is happening – time that would be far better spent doing something productive and not chasing basic administration.

Document Management
Compleat P2P is delivered with the ability to attach electronic documents in a very broad range of formats.

Compleat also supports tight integration to most leading document management software and can be configured to deliver a very high level of automation in the capture and attachment of documents.

Ease of Use and Productivity
Every organisation has a large proportion of their workforce that is involved in the purchasing, approval and finance processes.

Almost all of these staff will have no experience of purchasing automation software, and in many cases, any sophisticated workflow software.

The importance of ease of use is fundamental. In order for the organisation to get the best value, everyone involved in purchasing will need to use it and that requires training. Then there are the joiners and leavers, so training is an on-going requirement.

First time users can be successfully trained on the day to day use of Compleat in as little as 30 minutes, as the consistency and ease of use of Compleat is comparable to many websites. And because Compleat P2P is a browser application, most staff find it extremely easy to adopt.

The productivity gain for each user is very significant. Whether their role is order creation, receipting, purchase invoice capture or approvals, all will recognise how much easier, faster and more convenient Compleat is compared to the manual process.

The most common comment from users is, “how on earth did we manage before.” The answer is they spent much more time doing it.

Compleat Buyers Group (CBG)
Compleat P2P is a key component to introducing Spend Control.

CBG takes the process one significant step forward. CBG reduces the costs of what organisations already buy and then maximises those savings by making sure the staff always use the preferred suppliers at the preferential prices.

The CBG suppliers’ products and services have been electronically “captured” and are delivered within Compleat P2P as “Catalogue” items. The user simply searches for what they want to buy (e.g. paper) and they are presented with the available options, using the suppliers part numbers and description at a price that is only available as a CBG member.

CBG’s buying power ensures that for most small to medium sized organisations, our prices for the vast majority of overhead goods and services are considerably less than an individual organisation can negotiate.

The result is quantifiable and sustainable hard cash savings on every order placed through a CBG supplier. Cash that never leaves the bank account and goes straight to profit.

See the Compleat Buyers Group factsheet for more information.