Get an overview of the procure-to-pay process, why it matters, and the key business benefits of digitizing the cycle from end to end.
Offices around the world have changed. Remote work has become commonplace. Office space has been reduced and streamlined. Hot desks may be the new norm. Most notably, businesses worldwide are moving in a new direction with their operational and financial processes, to maintain their competitive edge. Not doing so places businesses at risk of shutting their (lately metaphorical) doors entirely, as has happened to so many businesses during the Covid-19 pandemic.
The vast majority of businesses that remain are turning to cloud technology solutions, to enable business continuity and assist in the necessary financial control required in these challenging times. Procure-to-pay software in particular is in high demand, providing the efficiency and cost control vital to every business in today’s constrained economy.
What is procure-to-pay software? It refers to software that provides online and on-the-go purchase requisitioning, approvals, purchase order generation, receiving, invoice approval, and payment for goods and services.
The best procure-to-pay software solutions provide automated workflows from the requisition to the invoice stage, enabling your organization to cut resource costs. However, no two solutions are identical, and with so many on the market, it’s easy to become overwhelmed when deciding on the right one for your business.
What do you need to look for when choosing the best procure-to-pay software for your business?
Essential procure-to-pay software features
Whether your business needs a basic and streamlined procure-to-pay software solution, or a comprehensive system with multiple modules, these are the features that are absolutely vital to have.
1. Easy integration with your existing tech stack
Outdated procure-to-pay solutions offer few or clunky integrations, and they cost you more in the long run, as you’ll struggle to integrate essential third-party systems.
To avoid choosing an incompatible solution, make sure your prospective options are flexible enough to integrate with your existing tech stack as well as any other SaaS solutions you may deploy in the future.
The best procure-to-pay software will be cloud-based, with an API portal that allows integration with multiple third-party vendors, supporting your current solutions and allowing for scaling with business expansion.
2. Built-in spend analytics with effortless visibility
Procure-to-pay software should offer spend analytics that are easy to access, so that you can make informed business decisions, spot inefficiencies, and address risks.
These analytics and the resulting insights provide an in-depth look into the behavioral spend activities of your business. Consider the bulk data your business generates; you should be able to view it all neatly categorized in a bar graph, pie chart, or filtered report that can be exported. A sophisticated procure-to-pay solution can offer you data visualization that is as segmented as needed, enabling your business to:
- Set up budget pop-ups and dashboards
- Analyze budgets vs actuals
- Gain real-time insights into your organization’s spend, budgets, and risk factors
- Generate intuitive reports on any aspect of the procurement life cycle
Here are the three types of invaluable data features:
Spend analytics: Visibility is key to identifying saving opportunities and understanding how your business spends money. Choose a solution that offers concise purchasing data to give your teams actionable insights to drive the right course of action.
Vendor analytics: Accurate vendor analytics will allow your teams to track spend by vendor and purchasing volumes and frequency. Leverage this data in negotiations, so you can qualify for discounts and more favorable terms.
Reports: Your solution needs to generate custom reports at the click of a button. Real-time data should be represented clearly and simply, to allow for a quick and easy snapshot of summarized information. The best procure-to-pay software will provide reports on:
- Employee spend
- Transactional spend
- Spend by supplier
3. Greatly reduced requisition-to-purchase order cycle times
Perhaps one of your most important interests regarding future procure-to-pay software is its purchase request (PR) and purchase order (PO) functionality. You’ll be happy to know that the best procure-to-pay software solutions can reduce your purchase order processing time by as much as 70%.
Modern solutions digitize your requisition-to-purchase order process with a smooth, automated purchasing approval workflow that enforces policy compliance, eliminates delays, and minimizes human error. The solution you select should enable you to accelerate each new request submission and approval, with robust controls at each step.
The following aspects are the best procure to pay software features that will simplify your requisition-to-PO process; have you seen these during your procure-to-pay software demo?
Paperless processing: You should never have to print out or locate a request or PO; all your data should be digitally saved and centralized, freeing up your time.
Cloud storage: Your solution should securely back up all your documentation to the cloud, covering all aspects of data compliance and allowing for easy retrieval at any time.
Mobility: Dedicated mobile apps and multi-device functionality enable various stakeholders to submit, approve and process requests, or ask for more information while on-the-go.
Automatic alerts and notifications: Timely and fully automated in-app, mobile, and email notifications assist in keeping your teams up to date when action is required. All relevant stakeholders should be notified of the status of every requisition and claim. Built-in alerts will flag potential risks and drive compliance with policy and procedure, ensuring your teams consistently remain within regulation and budget.
Visibility: The best procure-to-pay software will facilitate transparency across purchase requisitions, expense reports and procurement operations, offering authorized users budget insights at key decision points.
Your software solution should simplify the requisition process, as well as these essential functions:
Vendor management: An effective procure-to-pay process requires control around vendor approval, ensuring that purchasing can only occur with contracted or authorized vendors.
Purchase order generation: Generate fast and easy POs as soon as requests are approved. Purchasers should have the ability to submit orders individually, or to consolidate numerous orders to the same vendor prior to generating POs. Your procure-to-pay software solution should also enable the configuration of automatic PO generation upon approval, as well as allow buyers to directly send POs to authorized vendors via email from within the application.
Change orders: Exchange rate changed? Wrong delivery address? Quantity adjustment required? The requirements for PO amendments should not become issues once a purchase order has been created. The best procure-to-pay software solution will allow the modification of PO information without interrupting business processes or adding time-consuming steps to the procurement life cycle.
Requisitions to RFQ: Transferal of purchase requisitions to new requests for quote (RFQs) should be easy, automated, collaborative, and should notify the relevant users of next steps required.
Approval workflow: With reliable approval workflows configured in your procure-to-pay system, you can rest assured that financial control will prevail. Escalating levels of approval for all requests and claims, based on roles or request value, will ensure that all costs are authorized before they are incurred.
Internal controls: Enable authorized users to review the impact of spend against budgets, prior to approval. Spending policy rules should be enforced with alerts for non-compliance, and the system should provide detailed audit trails of each step in the procure-to-pay life cycle.
Intuitive platform: An intuitive interface and ease of use ultimately drives user adoption, which is a critical factor in whether your procurement investment is a success.
4. Finding and matching invoices in your procure-to-pay software solution should be hassle-free
Invoice matching has historically been a time-consuming yet necessary process, to ensure that your business only pays for goods and services requested and received. However, the best procure-to-pay software should accelerate and streamline this practice through various configuration and automation features.
Three-way matching: With digitally configured three-way matching, your invoices are linked to requests, POs and goods received note (GRN) records. Exception alerts will notify users of any discrepancies, eliminating the risk of human error and over-payment.
Integration and invoicing: Seamless API integrations enable your procure-to-pay software to connect directly with your finance system. Integration allows for faster invoice approval and processing in systems like:
- Sage solutions
- Microsoft Dynamics solutions
- Or other accounting or ERP systems
Make spend management easy with the best procure-to-pay software solution for your business needs
There you have it—these are the most essential markers to identify whether your prospective procure to pay software will benefit your business by meeting its most fundamental spend management needs. The features above provide accuracy, control, time-saving automation, reduced purchase cycle times, and a decrease in invoice processing costs. This, in turn, enables your organization to streamline the entire procure-to-pay process.
Watch this demo video for a step-by-step guide to Fraxion's procure-to-pay workflow:
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Functionality speaks volumes; make sure these boxes are all checked when selecting the best procure to pay software for your business needs. Reach out to our team for spend management advice or request a one-on-one demo of Fraxion’s procure-to-pay software. We look forward to helping you navigate your procurement needs.