Employ Artificial Intelligence, Vendor Requisitions, and Configurable Workflows for Agile Procure-to-Pay Business Processes
Managing vendor relationships, supplier bids, contracts, vendor quality issues, returns, and accounts payable processes are challenging without the right business software. Even small manufacturers and distributors rely on hundreds of vendors for materials and outsourced services. There are many disconnected systems and activities in procure-to-pay processes, but none are as crucial as the financial management of vendor bills and payments. Despite technological advances, most AP invoices are still received on paper with manual processes for approvals and payment via paper checks. Efficient procure-to-pay processes rely on connectivity, collaboration, and automation.
Modern ERP applications provide a foundation for managing items, suppliers, subcontractors, and inventory replenishment. Material requirements planning and connected requisition systems automate the procurement process. Barcoding and warehouse management streamline receipt and put-away processes. Efficient processes reduce data entry errors and provide real-time visibility into data to cut costs, streamline supply chains, and improve profitability.
This Solution Brief illustrates how Acumatica’s business intelligence, machine learning, and configurable workflows streamline the entire procure-to-pay process for manufacturers and distributors. Take control with a future-proof ERP application built for tomorrow’s supply chains. Harness automation to do more with less staff. The procure-to-pay process encompasses four phases and twelve unique steps, from item definition and supplier management to financial reporting and business analysis.
PHASE 1: Preparation
The procure-to-pay process begins before the first purchase order is created. Companies define inventory items for stock and non-inventoried items. Setup vendors and implement systems to manage supplier relationships. Configure inventory replenishment and material requirements planning to automate the purchasing process.
PHASE 2: Procurement
Purchase requisitions are essential for sourcing new items from existing or prospective suppliers. Acumatica’s embedded Requisition Management application provides automation for vendor bidding and conversion of requisitions to vendor and item records in the application. Purchase orders are also created with native inventory replenishment, material requirements planning (MRP), and manual purchase order creation activities. Acumatica supports blanket purchase orders and drop shipments from vendors directly to customers. Configure receipt of goods and put-away workflows to complete the procurement process.
PHASE 3: Payment
Vendor payment is fraught with manual processes. Despite advances in technology, most companies still process payments manually from paper invoices received in the mail or electronic bills in their email. Accounting professionals spend countless hours entering data, matching invoices to purchase orders, and processing payments. Manual processes are prone to data entry errors and delay payments resulting in late penalties that strain vendor relationships. Modern ERP applications like Acumatica provide artificial intelligence and machine learning to automate payment processing enabling small companies to scale without adding staff.
PHASE 4: Process Improvement
Every financial transaction is posted to the General Ledger for financial analysis and reporting. Generic inquiries, dashboards, and business intelligence applications enable users to create key performance indicators with drill-downs to view source transactions. Identify overdue payments before they become a problem and analyze vendor performance. Reporting and analysis tools enable management to adjust workflows to streamline the procure-to-pay process. Extend the process with related applications to manage documents, asset procurement, professional service purchases, and more for a holistic view of your business.
If your business is striving for procure-to-pay automation, disconnected systems and activities are your enemy. By upgrading to a cloud ERP platform, you can manage hundreds of vendors on one system for greater efficiency and lower costs.
Read this solution brief to find out:
- Three key steps to take before you even create a PO.
- How to save time by automating vendor bidding.
- Highly efficient ways to create purchase orders from other documents.
- Why so many companies still process payments manually—and what to do about it.
- How to make continuous improvements in your business processes.