Benefits of Procure to Pay (P2P) / Accounts Payable Outsourcing

Benefits of Procure to Pay (P2P) Outsourcing

Procure to Pay is defined as the process of obtaining and managing the raw materials needed for manufacturing a product or providing a service. The process encompasses the entire journey from planning the materials required and placing the order to making the payment.

But this journey traverses its way through many departments and through the signatures of many managers. On the way, many decisions are made and many documents are created. This is the perfect recipe for an organization to face increasing chaos and rising costs. Many companies look at outsourcing as a solution to these problems.

There are many sub-processes that can be outsourced to save the company costs. Invoicing, purchase order management, data processing, reconciliation and even dispute resolution can easily be put in the hands of a third party service provider.

If the outsourcing deal crosses international borders, and it frequently does these days, then both parties gain from the exchange rate conversion. They also gain from the time difference, and if used judiciously, it allows the business to stay functional around the clock.

Benefits of outsourcing Procure to Pay (P2P) / Accounts Payable:

  • Indexing of Data: 

    A leading BPO company will facilitate the extraction and indexing of all information contained in Procure to Pay-related purchase orders, invoices, payment records and so on. With the need for paper-based documentation getting reduced, there is less chaos and confusion and any time the parent company needs details on some aspect, it can easily be found in the digitized records. They do not have to worry about storing and securing minor pieces of data and large volumes of paper-based files.

  • Focus on Core Capability:

    The company can focus on their core operations. Skilled personnel who would have wasted their time and talent on repetitive data processing work can be deployed to more demanding and vital roles. The company can also reduce their recruitments and instead run a lean and mean business.

  • Value-Added Services:

    A specialist outsourcing company would also provide a wide range of value added services like analytics, process improvements and upgrades in technology. On their own, many companies would not invest in analytics since they have neither the expertise nor resources for such work. But an outsourcing company that focuses on a specific domain would see value in investing in new technology or hiring skilled analysts. Their research can tell the parent company much about how they can streamline their operations and reduce their costs.

  • Leverage Technology:

    A good outsourcing company would also make it a point to invest in the latest technology, and whenever an upgrade needs to be made they can do it faster and cheaper than their client companies. Since their teams are sent for regular IT training and they have personnel who are trained on Six Sigma and Lean, the switchover happens efficiently. Therefore, it does not take long for a new process to go live.

  • Scalability:

    Companies that have seasonal demand for their products and feel the need to hire data processors or workers on temporary contract are saved from this additional expense. A capable Finance and Accounting outsourcing services company could easily move personnel between their internal teams during unusual spikes in work volume and manage the load effectively. They also cross train people so that there is always back-up during times of crisis or excess workloads.

  • Retaining Control and Visibility:

    Businesses might be concerned as to how they can keep a check on whether the work is being done properly or not. They are after all entrusting a vital part of their operations to another firm. But they need not worry.

    First of all, it is up to the parent company to decide what they want to outsource and what they wish to keep in-house. They can easily outsource non-critical functions and repetitive data processing work, while keeping the vendor facing roles in-house.

    Secondly since an expert outsourcing company is going to be using software-based accounting and reporting solutions to complete these operations, the parent company can keep a check on the work at their end. In case something is not done according to the service level agreements, they can always raise the issue with the manager of the service provider’s processing team.

  • Adherence to SLA: 

    A specialist Accounts Payable outsourcing services company will adhere to service level agreements, and measuring up to key performance indicators. This further ensures the safety of the work being done.

  • Industry Best Practices:

    When selecting an outsourcing partner, care should be taken to choose one that satisfies industry benchmarks, such as ISO certifications, and follows global best practices to ensure positive results for the client.

Procure to Pay is a vital part of the operations of the firm that has a deep impact on the bottom line. Outsourcing certain functions can not only ensure greater efficiency and increased data security, but it can also save cost.

Read Also Related Posts:

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1 6 Reasons Businesses Must Outsource Finance and Accounting
2 The Ten Generally Accepted Accounting Principles ( GAAP)
3 3 Major Challenges of Using Paper-Based Invoices
4 6 Ways To Conquer Major Accounts Receivable Challenges

For information on how Invensis Technologies delivers value to your business through Procure to Pay Outsourcing Services, please contact our team on US +1-302-261-9036; UK +44-203-411-0183; AUS +61-3-8820-5183; IND +91-80-4115-5233; or write to us at sales {at} invensis {dot} net.

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