Walk anywhere within the Institute of Finance and Management’s (IOFM) AP & P2P Conference and Expo, and you’ll find legions of technology providers with integrated, single-vendor systems for automating the procure-to-pay (P2P) lifecycle.
These systems automate the purchasing and purchase order (PO) presentment process. They automate invoice processing. And they manage payments to suppliers.
But deploying one of these integrated, single-vendor P2P systems may be compromising. For, despite everything you may have heard from P2P technology vendors, the ultimate payback will never be found in one of these all-in-one systems. No, it’s waiting for you in an integrated P2P platform that combines best-of-breed components for purchasing, PO requisition and presentment, invoice processing, and payments.
A lot of businesses start their P2P automation journey assuming an integrated, single-vendor system is essential. In fact, many ERP vendors have built functionality for almost every financial operations need including P2P. But this approach may not deliver the value and flexibility that most businesses expect. Integrated systems are inflexible, hard to use, costly to implement, and lock businesses into a single-vendor stack.
Importantly, all-in-one P2P systems invariably force users to sacrifice functionality, often in invoice processing. Consider that most providers of integrated P2P systems have a pedigree in procurement.
That’s why more businesses are shunning integrated systems in favor of best-of-breed platforms.
Organizations no longer need to choose between deploying standalone systems that perform one function very well (e.g. invoice processing) and integrated, single-vendor systems that offer modules for multiple P2P functions, with varying degrees of functionality. Web standards, open application programming interfaces (APIs), technologies such as XML, and cloud-based applications make it easier to deploy a P2P platform with best-of-breed components from different technology vendors.
With a best-of-breed platform, businesses get flexible, robust and specialized components for each part of the P2P lifecycle: PO requisition and presentment, invoice processing, and supplier payments. A best-of-breed approach empowers businesses to add and replace applications as necessary, without being tied to a single vendor system. And, unlike integrated, single-vendor systems, best-of-breed platforms can be easily integrated with any ERP system including SAP, Oracle, MS Dynamics and many others.
A best-of-breed approach to P2P automation also ensures that the platform meets the unique needs of businesses in industries such as healthcare, pharmaceuticals, media, telecommunications and more.
When developing a best-of-breed approach to P2P automation, businesses should take a hard look at invoice processing -- an area where most integrated, single-vendor P2P systems are functionally deficient, and where the lack of full automation at most businesses offers the greatest potential for payback.
Compared to integrated systems, the invoice processing component in best-of-breed platforms offers:
- Optimum accuracy without additional work: Invoice processing errors create enormous problems in terms of rework and incorrect or duplicate payments to suppliers. Some providers of best-of-breed invoice processing platforms guarantee 99.95 accuracy.
- Faster approvals: Businesses want to accelerate invoice cycle times to reduce late-payment penalties, capture more early payment discount opportunities, reduce inquiries from suppliers regarding the status of invoices and payments, and improve financial reporting. The invoice processing component of best-of-breed P2P platforms speeds approvals by automatically routing exceptions to the appropriate individual based on pre-configured business rules.
- Better results over time: The typical accounts payable professional spends 84 percent of their time on heads-down transaction processing, IOFM finds. The machine learning used by the invoice processing component of leading best-of-breed platforms recognizes and applies the steps used to process invoices, to help eliminate repetitive, menial work over time.
- Collaboration: Improving collaboration with procurement and other stakeholders is a top accounts payable priority, Ardent Partners reports. The invoice processing component of best-of-breed P2P platforms facilitates online communication and collaboration, eliminating back-and-forth phone calls and e-mails and reducing the possibility of processing delays.
- Transparency: Controllers cite a lack of visibility as their top accounts payable challenge, per IOFM. The invoice processing component of best-of-breed P2P platforms delivers visibility across the invoice lifecycle, from invoice receipt through reconciliation and storage.
Businesses no longer need to settle for monolithic, single-vendor systems that force them to sacrifice functionality in invoice processing and elsewhere. Best-of-breed P2P platforms offer flexible, robust components for each step of the P2P lifecycle, in turn, delivering maximum return on investment.
Want to learn how a best-of-breed approach to P2P automation can benefit your organization? Contact Vanessa Emers, Solutions Consultant at 201.710.2417 or firstname.lastname@example.org.