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SECTION 4.3 - PROCUREMENT-TO-PAY MANAGEMENT
The last element of our Procurement Building Blocks is Procurement-to-Pay (P2P) Management. This is the operational side of procurement that encompasses the entire lifecycle of a transaction.
Procurement-to-Pay is the management of orders from initial requisition to the payment of invoices.
P2P Management provides organisations with numerous benefits such as visibility, control, reporting and consistency in processing payments to suppliers. P2P systems have been widely adopted by organisations for multiple reasons, including automation of the buying process. Eight out of 10 of the organisations we surveyed have implemented P2P systems.
Figure 56: DO YOU HAVE A PROCUREMENT-TO-PAY SYSTEM IN YOUR ORGANISATION THAT MANAGES THE PURCHASES FROM YOUR SUPPLIERS?
Don’t know No Yes
79.8%
18%
2.2%
0
10%
20% 30% 40% 50%
60%
70%
80%
The P2P process typically starts with the purchase order (PO) raised by the requisitioner. The PO provides an organisation with control over its purchases and is a contractual document that confirms the order of a product or service and the associated terms and conditions of that purchase. Furthermore, it enables an organisation to do a four-way matching (PO, contract, invoice, and delivery note). The majority of the organisations (77.5%) raise a PO for all of their purchases, while 16.9% raise a PO above a certain spend threshold.
Figure 57: IS A PURCHASE ORDER REQUIRED FOR THE PURCHASE OF PRODUCTS AND SERVICES?
Always For purchases over a set threshold Depends on the category of product or service purchased
77.5%
16.9%
4.5%
Not well defined
1.1%
0
10%
20% 30%
40%
50%
60%
70%
80%
Procurement-to-Pay processes are about saving time and effort in manual processes through automation. With that in mind, we asked respondents to indicate what methods they use in sending and receiving transactional documentation with their suppliers. Two-thirds of organisations (67.8%) send and receive order documentation electronically, while 21.8% send this documentation by post.
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