Do more with less. For many years, this is the challenge that companies have faced. In order to rise to the challenge, these companies are focusing on optimising and automating their processes. For procurement departments, streamlining and unifying their purchasing processes with accounting processes is an effective tool for accelerating the entire procure-to-pay chain.
Why align procurement and accounting processes?
Procurement and accounting departments often work independently. Each has its own policies, strategies and processes. However, a closer inspection reveals some similarities. For example, both strive to improve their company's cash flow and results.
The procure-to-pay process requires the integration of the procurement and accounting departments to enable the latter to receive purchase orders and related documents. However, manual tasks, such as entering and checking invoices, are still commonplace. According to PayStream Advisors, a quarter of incoming invoices are still submitted manually for approval.
Yet this involves risks: processing costs, long payment times, reliability of data etc.
This is a situation that is no longer viable in a climate of digital revolution and increasingly fierce competition. Using a suitable software solution to synchronise and automate its procurement and accounting processes is undoubtedly in a company's best interest. Eliminating silos and accelerating collaborations could therefore help them make significant strides.
What can we gain from aligning procurement and accounting processes?
1. The first advantage of aligning procurement and accounting processes is increased efficiency. Integrated procurement and accounting processes can actually shorten purchase request approval times from over 2 weeks to less than 48 hours!
2. The second advantage is undoubtedly financial, for example:
- Reduced processing costs (less time spent and fewer steps needed to perform tasks).
- More opportunities for advance-payment discounts.
- Savings in terms of labour costs (job roles consolidated into a single department).
3. Last but not least, the third advantage is improved visibility of spending and business activity. By bringing spending previously managed by two different teams into one place, companies can identify uncontrolled spending, fraudulent activities or even non-competitive or out-of-date supplier contracts.
Optimising communication between procurement and accounting is the first step towards success. So have you aligned your procurement and accounting processes?