Supplier relationships are highly dependent on the procure-to-pay (P2P) architecture that you have in place. Efficient P2P processes can build and improve your supplier relationships.
The traditional architecture uses a combination of paper documents and ERP systems. The goal is to streamline a workflow by digitizing a portion of the procurement process. The problem is that the presence of paper documents will bottleneck the overall efficiency.
Paper documents can get lost. They also have to be manually stored and retrieved.
Embracing e-procurement will allow you to reduce Maverick Spend and speed up the payables invoice processing system so that more than 90% of the invoices coming in can be handled without any kind of human intervention.
Capture the Data Intelligently
Rather than relying on paper invoices to enter your workflow, you can opt for business process improvement (BPI) solutions. For example, intelligent data capture will automatically translate paper invoices and other electronic documents into structured data. This data can then be used to exchange, communicate, and collaborate with an ERP system that you have in place.
By digitizing the entire process, you eliminate the need for an employee to sit and translate the paper invoice into actionable data. This is a time-consuming process that is slowing down your productivity. It also results in slowing down the time it takes for invoice approvals and paying your suppliers. It’s impossible to enhance supplier relationships if suppliers are constantly waiting a significant amount of time to be paid.
BPI solutions will allow suppliers to produce PO requisitions. The system will automatically be able to identify invoices, validate them, and match them with the PO requisitions. Approval routing can happen automatically as well. This will allow specific individuals to receive an electronic copy of the invoice in order to approve it with the click of a button. It also eliminates the paper trail that can cause so many problems in terms of getting the invoices from the mailbox all the way to the payables department where a check is cut.
Improvements at Every Turn
It’s easy to see how these various BPI solutions can improve efficiency and productivity. Invoices can be routed all the way through transaction entry. The only time an employee will need to take a hands-on approach is when there are exceptions. By dealing with exceptions as opposed to every invoice, it allows employees to work smarter. You will find that the entire accounts payable department works more productively because they can focus on supplier relationships as opposed to chasing PO requisitions and paper invoices that require approval.
This data-driven process can be applied to various documents beyond invoices. Purchase orders, supply request forms, and other documents can also be digitized. This eliminates the day-to-day routing steps that cause bottlenecks within your operations. You can simply empower employees to manage the various exceptions.
Efficient P2P Enhance Supplier Relationships
If you were to talk to all of your suppliers and find out the biggest problem, they will likely say that they wait too long in order to receive payment. If you can implement a new architecture that communicates with your ERP system, you can overcome this problem.
As you give suppliers what they want (faster payment) they will also start to give you what you want. They will have the ability to submit your next order faster because they would have to wait so long for payment. You may also find that many suppliers are willing to discount your invoice if you can meet a Net 5 or Net 10 as opposed to the standard Net 30 payment terms.
The added benefit of improving supplier relationships is that you can pass some of these benefits on to your customers, too.
Find out more about improving your supplier relationships with P2P by contacting ISS Group today. Let’s collaborate to get your ERP out of the status quo and into the efficient P2P architecture that aligns with BPI solutions that provide scalable alliances without sacrificing uptime, product, or supplier relationships.