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Conquering the Procure-to-Pay (P2P) process

Conquering the Procure-to-Pay (P2P) procedure

The challenges of the Procure-to-Pay (P2P) process: complexity, content and collaboration

Procure-to-Pay is one of the most common finance business processes used in the Microsoft® Dynamics 365™ finance business application. This critical process involves content such as purchase requisitions, purchase orders, contracts, and proof of delivery and more.  It intertwines essential departments such as purchasing, accounts payable, and logistics all while covering the essential steps required to obtain goods and services and pay for them.  

Today’s challenge in the P2P process is the high complexity involved in managing numerous forms of content and orchestrating stakeholder collaboration required to review and approve elements of the process.

This content rich process is often a fragmented mixture of manual efforts and semi-automated processes which grapple with topics and questions such as: 

  • Document accessibility: Who has access to the documents?  Are all the documents viewable?
  • Use of Microsoft Teams: Are accounts payable, purchasing or logistics users using Microsoft Teams? This can present additional challenges with the creation of more content siloes and content chaos.
  • Emailed documents: Are documents that are included as email attachments captured, properly preserved, and accessible and viewable for all the stakeholders who need to collaborate (such as signature) or approve as part of the process? 
  • Policy and regulation compliance: Are all the documents and attachments preserved and governed according to company policy and aligned with external regulations?
  • Document organization: If the company is ever audited, can it provide the documents easily as requested or is it an arduous and expensive project?
  • Process monitoring: Is there a way to monitor the entire P2P process to ensure optimal performance and proactively address issues before they get out of hand? 

Potential content chaos, poor collaboration, and cost issues

With the current challenges of the Dynamics 365 and SharePoint integration, customers often use both SharePoint and Dynamics 365 attachments, which has its limitations and cost challenges. As a result, content is scattered across multiple sources, including as attachments to Dynamics 365 records, and correspondence with vendors or internal stakeholders is often not recorded.  

Wasted time and costly expenses can be incurred if processes are not streamlined. Purchasing and accounts payable teams can spend way too much time manipulating documents, and performing audits which can become problematic, if not done properly — which can lead to costly penalties. Additionally, not being able to store correspondence makes collaboration and resolving vendor disputes difficult.

Weak processes = Poor results

Weak P2P processes will result in a long list of negative consequences for an organization. These consequences can be lofty and span across many departments within an organization. 

Typical consequences from a weak P2P process are:

  • Loss of revenue  
  • Stalled deals  
  • Poor cash flow management 
  • Frustrated vendors and customers
  • Lack of inventory
  • Inability to manufacture due to missing parts

The good news is that untangling this complicated process is possible. It won’t be easy but can be done. Think of it a lot like weaving through Friday afternoon traffic to get home. It’s not easy, but you must do it if you want to reach your destination. 

A holistic approach to conquering the P2P process

Conquering the P2P process in its entirety requires a thorough review of each step in the process, a full toolset to address what’s needed to complete each step and consideration of fully automating the processes.  It is not something that can be truly resolved with an incremental approach. It must be done thoroughly to be effective. 

Consider each of these areas and how they can help drive your financial business processes:

  • Capture: Make sure to capture all data and documents that are essential inputs to the financial process  
  • Access: Secure access to all the information needed by each stakeholder 
  • Collaborate: Share and collaborate in the document elaboration and approval with visibility in each stage of the process 
  • Preserve: Store or destroy documents according to company policy and regulations
  • Monitor: Consistently oversee information processes and provide insight that can provide proactive recommendations

Getting stakeholders buy-in and producing meaningful metrics

Building a robust and holistic finance business process also requires meeting the needs of all stakeholders such as purchasing agents, logistics, project managers, account payable staff, signatory approvers, vendor managers, records managers and more.  The final output should be a process that generates metrics that will benefit stakeholders and earn buy-in.

Consider a process that drives metrics such as:

  • Reduced time and effort to create a PO and approve a vendor invoice 
  • Reduced rate of exceptions 
  • Reducing the cost of paper and paper handling
  • Reducing exposure that could lead to potential fraud  
  • Improved cash flow 
  • And more… 

You don’t have to tackle this process alone. For companies that want a streamlined Procure to Pay process that results in increased revenue control and reduced A/P, the way forward is a holistic approach that automates the entire process, incorporates all the required content and actions, and eliminates manual interventions. 

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