SAP Procure to Pay Links Procurement with Accounts Payable

 

SAP Procure to Pay Links Procurement with Accounts PayableProcure to pay, as in SAP Procure to Pay, is a standardized term used by software developers such as SAP and Oracle that refers to a procurement process that links purchasing to accounts payable (Source: Dolphin Corp. SAP Procure to Pay)..

The SAP procure to pay process involves a number of steps, many of which vary from one company to the next. For example, the procurement to payment cycle often includes the following steps:

  • Requirement identified
  • Purchase requisition issued
  • Purchase requisition approved
  • Procurement
  • Suppliers identified
  • Quotes requested
  • Quotes evaluated
  • Negotiations entered
  • Vendor selected
  • Contract signed
  • Purchase order issued
  • Purchase order acknowledged
  • Shipment made
  • Goods received
  • Invoice sent to accounts payable
  • Payment issued

As with other SAP business process improvement strategies, SAP procure to pay can vastly improve business processes – in this case, the accounts payable process. For example, manual accounts payable processes are labor intensive with a great deal of manual data entry and paper processing requirements. When volume is high, this manual work can consume much of an AP worker’s time. With SAP procure to pay processes in place, much of this processing (such as matching invoices to purchase orders) can be handled by the software. As a result, accounts payable employees can work much more efficiently and focus their efforts on higher value projects.SAP procure to pay automation can deliver many important benefits including:

  • Lower invoicing / accounts payable costs
  • Less time spent manually processing invoices
  • Better supplier relationships
  • Improved ability to capture early payment discounts, volume discounts, and rebates
  • Reduced staffing requirements
  • Lower storage costs
  • Increased supply chain visibility
  • Improved ability to make cash flow decisions
  • Improved cycle times

SAP procure to pay makes sense for businesses of all types and sizes. From improving communication to automation, SAP business process improvement focuses on efficiency measures.

James Hadley is a professional business consultant specializing in business process management solutions. He resides in the Bay Area and loves to travel all over the world. To know more about the author, connect with him on Google+.

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