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Purchase to pay – an explanation

by | February 2, 2021

Procurement as a business function needs to have a mission, which is agreed and understood by all its stakeholders. To support this purpose, there should be a clear vision of how it will be achieved, a direction of travel and a comprehensive plan for the journey.

Procurement has recognised the need to elevate itself beyond being just the traditional business function and play a more strategic role in the organisation. Having a better understanding of what is core versus what is non-core, whilst buying in to an end-to-end remit for all third-party expenditure, is what it takes to be a best in breed procurement function.

What is Purchase to Pay

According to Gartner’s Glossary: “a procure-to-pay (or purchase-to-pay) system is a fully integrated solution designed to support an end-to-end process that begins with goods and services requisitioning and ends with ready-to-pay files for upload into an accounts payable system”.

Implementing a Purchase to Pay solution will significantly improve an organisation’s procurement processes and help achieve sustainable cost savings.

Planning for a Purchase to Pay solution

Going live with a Purchase to Pay solution means that your organisation has to manage strategic and transactional procurement systems, with hundreds or thousands of suppliers and users. Not investing enough time into a clear plan with deadlines can make the difference between the success and failure of your project, many months or years after implementation.

Benefits of a Purchase to Pay solution

  • Improved visibility over all your procurement processes. By using a single platform, users can access information easier and have access to real-time data.
  • Improved spend analysis by having a deeper understanding of your data. When you use the information you have about where your money is going you can optimise your company’s spending to meet goals, reduce costs and improve efficiency.
  • The supplier management process is much clearer for the organisation and for the suppliers, as the whole process is handled through the same platform.

Another important benefit of a S2P implementation solution is reducing unnecessary purchases via a more structured approval process and encouraging increased consideration from requesters and approvers of whether a purchase actually needs to be made.

Furthermore, using the improved (often real time) reporting capability of a Purchase to Pay software, key areas of over consumption can be identified and targeted. This removal of waste simultaneously produces reductions in cost and removes the environmental impact of the production of additional goods that will not generate value for the business.

If you are interested in learning how your company can take explore the benefits of a Purchase to Pay system, don’t hesitate to get in touch with one of our procurement specialists!