What makes a Procure-to-Pay (P2P) process best-in-class? The answer to that question changes over time as the roles of P2P change, too.
You’ll recall many moons ago when Finance and Procurement existed in separate silos, each group essentially focused on its own goals and objectives. That was the norm. That was just “the way things were.”
But today, finance leaders know that’s no longer good enough. Considering how effective companies must be to maintain a competitive edge and satisfy vendors, collaboration is key. You want to open the floods of communication, offer visibility and share metrics. Working toward common goals will make P2P stronger and your company more profitable.
What should CFOs be focusing on now? Here are three Procure-to-Pay trends from Direct Commerce that’ll help you connect your teams and stay ahead of the curve:
1. Cultivate a well-trained P2P staff
You’ve seen firsthand that A/P’s and Procurement’s roles are both becoming more strategic. It’s not just about creating P.O.s and paying bills. Now, it’s also about streamlining steps, providing top-notch customer service and analyzing data to make better business decisions in the future.
So, it’s critical to continually groom your staff and fill skills gaps. And it doesn’t have to be a huge investment – it can be done through regular in-house training. Specifically, with Procure-to-Pay staffers, you’ll want to foster:
- leadership qualities
- strategic thinking skills
- operational expertise
- creativity, and
- analytical skills.
2. Build vendor relationships
The dependability of vendors is a growing concern for companies today. Finance leaders need to be sure they hang on to those vendors who continually meet your needs, even as your business grows. Because of that, many companies are now focusing more on maintaining strong vendor relationships.
First and foremost, you want to ensure P2P staffers are providing excellent customer service. (Again, here’s where training comes in. You can enhance your staff’s service skills through lessons on communication techniques, problem solving and more.)
Also, it’s a good idea to have them monitor vendor performance (e.g., timeliness, contract adherence) and respond accordingly. That may mean a “thank you” when they’re on their game or a serious talk as soon as they’re falling behind. And it goes both ways: Make sure your staff gives vendors the opportunity to offer feedback on their performance. That way, any issues vendors have with P2P can be resolved quickly.
3. Develop your digital strategy
More than ever before, Procure-to-Pay is taking advantage of new technology like artificial intelligence and machine learning. But what specific features should you add? Where in your P2P process do you incorporate them? Will certain steps remain manual?
Finance leaders can cover all that in their digital strategy. But surprisingly, only 32% of companies have a proper digital strategy, found The Hackett Group. Be sure to schedule time for you, the Procurement lead and other members of the executive team to organize a clear, outlined vision. Then that vision can be broadcast and fulfilled throughout P2P.