Transformation Solutions

 Chances are they are… Automating the procure-to-pay cycle has long been considered as a ‘good-to-have’ and not critical by Small- and Medium-size Businesses (SMB). And the reason for it may well be the thought of heavy capital expenditure. And with that apprehension, SMEs chose to lose all that automation can offer.

Ever-growing regulatory restrictions apart from demands for increased agility are not new to SMEs. In a recent survey by Paystream Advisors,

• More than half (51%) of the SMEs surveyed stated that one of the primary challenges they face in the accounts payable process is manual data entry and the errors and inefficient processes that arise as a result of it
• It was found that decentralized invoice receipts and lack of workflow tools have made it very difficult for 50 percent of organizations to route invoices and approve them in a timely manner, leading to late payments and missed discounts

Automation of the procure-to-pay process is shunned upon because of the misconception that it is too expensive, while all it requires is due diligence and defining the right tools to automate. I believe that there is a lot that you can gain from automation, and here are a few reasons why you should automate:

1. You can enforce rules upfront, and these workflow rules automatically create clarity on various procure-to-pay processes. First, any ambiguity on who the approver is can be done away with. Treading this path implies that the company does away with the usual anomalies that are quite rampant in traditional procure-to-pay processes, and often require the entire process to be repeated
2. There is instant access to data that reveals who is spending, what they are buying and from which vendors — even if the spending does not originate through the approved procurement process. Needless to say, this could be your best support for enforcing internal controls
3. There is a paradigm shift in the way the C-level regards the procure-to-pay function today. It is no longer a cost center, and is instead, viewed as a profit center. Thus, you need to find innovative ways to plug leakages due to delays
4. You can capture early payment discounts more effectively, thus driving down your costs One of our leading clients had numerous non value-added and manual tasks, including paper-based approval of requisitions / POs, labor-intensive invoicing process and painful exception management for non-PO invoices. Following the automation of their systems, the client saw a number of benefits, including creating / changing purchase orders with a very short turnaround time; streamlined invoice processing with minimum exceptions and better compliance with payment terms.
   
   I believe that as an SMB, automating the procure-to-pay process will only lead to increased efficiencies, leaving considerable scope for you to re-position your staff to other strategic activities.