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The environmental benefits of using Procure to Pay software

by | May 18, 2018

With environmental issues perhaps slipping down the political and consumer agenda in these tumultuous times, it can be easy to for procurement leaders to focus on the bottom line. However, when it comes to the use of procure to pay software (P2P), the bottom line and environmental benefits are often intrinsically linked.

Of course there is the evident benefit of reduced energy and paper consumption; P2P software can remove the need for the printing of thousands of documents a year through the automation of finance, accounts payable and requisition processes and supplier document exchange, creating significant waste reduction for both customers and suppliers.

However, perhaps the key environmental benefits of P2P relate to bringing spend under stronger management. A successful P2P implementation can reduce unnecessary purchases via a more structured approval process and encourage 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 P2P 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.

Establishing a structured supplier onboarding process is core to an effective P2P implementation, and to controlling procurement spend. This process can also be utilised to improve environmental performance, whether via direct procurement policy contributing to Corporate Social Responsibility (CSR) objectives or through indirect benefits of the software. P2P, e-sourcing and contract management can all be used to drive spend towards suppliers which support a firms’ commercial and environmental agendas, for instance by only allowing the use of suppliers with the requisite environmental credentials, or by using P2P functionality to recommend a certain ‘greener’ supplier to a requester.

Mandating that new suppliers have procedures in place for incoming environmental legislation puts a customer ahead of the curve when it comes to market change, providing competitive advantage, and ethical sourcing practices can be defined in an onboarding questionnaire to support CSR targets. This refined onboarding process can also be used to streamline the supplier base, pushing spend towards a smaller number of targeted and vetted suppliers and generating potential logistical and production economies of scale, thereby reducing energy consumption, whether green procurement is a priority or not.

So whether it’s reduced paper, waste or energy consumption, P2P is capable of simultaneously driving down costs and reducing the environmental impact of a procurement operation.

Have a chat with one of our talented procurement consultants and learn how a P2P solution could benefit your business.