Automation is key for creating an effective procure-to-pay process

As a company owner, you have to purchase goods and services to run your business. Because everything you need to keep your organization operational has a cost, you need to understand your procure-to-pay process. 

The basic procure-to-pay workflow

The Chartered Institute of Procurement & Supply defines procure to pay as the “process flow from requisition and purchase through to payment and accounting for purchases.” Simply put, it’s the standardized process of ordering and paying for the goods and services you need to run your business.

The procure-to-pay process workflow breaks down into these basic steps: 

1. Identify a need. Procurement teams must first identify business needs, find potential vendors, and establish costs for goods and services required throughout the organization.
2. Generate a purchase requisition. Once the team identifies the needs, the next step is to create a formal request to make a purchase. This is an internal request only, and it goes to accounting.
3. Approve the requisition. Department heads and procurement officers review the requisition request and either approve or reject it.
4. Create a purchase order. Once the decision-makers approve a requisition, the procurement team creates a purchase order stating the scope of work.
5. Approve the purchase order. All internal stakeholders review and either approve the purchase order or request adjustments before signing off. Once they’ve approved it, the procurement team sends the purchase order to the vendor for their approval.
6. Receive the goods. Once the vendor delivers the purchased items, the buyer inspects them and either approves or rejects them based on the specifications agreed upon in the purchase order. If the buyer approves, they issue a goods receipt. 
7. Evaluate the performance of the supplier. The procurement team evaluates the vendor based on certain criteria. That information dictates whether or not to use the supplier in the future.
8. Approve the invoice. Procurement sends an approved goods receipt to the accounting team for payment and to check for three-way matching between the purchase order, vendor invoice, and goods receipt for authenticity and accuracy. If it all checks out, accounting approves the invoice.
9. Pay the vendor’s invoice. Once accounting approves the invoice, the team processes the payment based on the terms set in the invoice. 

While the specifics of each step may differ from one company to the next, these are the essential steps in a procure-to-pay process that businesses of just about any size and in any industry will follow.

The benefits of automating your procure-to-pay process

As business and finance writer Caroline Banton explains, “The key benefits to purchase-to-pay are efficiency, cost savings, and increased financial and procurement visibility.” To capitalize on those benefits, your business needs a strategic workflow for your procure-to-pay process in order to manage procurement and maximize efficiencies in purchasing goods and services.

Streamlining that process will further help you save on costs, increase the transparency in spending, and improve control measures for managing purchasing. Automating the process is key to making the process run smoothly. For example, automated procure-to-pay solutions can 

• Increase transparency for the entire workflow
• Facilitate communication between stakeholders in the procurement process 
• Track and manage supplier contracts and terms 
• Capture data from transactions
• Mitigate risk associated with human error 

According to research by McKinsey & Company, nearly 60 percent of individual tasks in the procure-to-pay process are ripe for full or partial automation. This gives you plenty of opportunities to eliminate inefficiencies inherent in the workflow when your team completes steps manually. The right tool can save you time and money by streamlining and optimizing the process. 

Jotform: The tool you need to streamline your workflow

Jotform is the perfect solution for automating your procure-to-pay process. We have a number of different form templates that can help you each step of the way:

• Stock inventory form 
• Inventory checklist form
• Purchase request form 
• Product purchase order form 
• Supplier registration form
• New vendor setup form 
• Vendor contact form 
• Request for pricing form 
• Sales agreement form 
• Contract templates 
• Terms and conditions form 
• Receiving checklist form 
• Inspection forms 
• Authorize payment form 
• Payment receipt form

We also have a variety of table templates that can serve as a database for managing and tracking the data you collect through the forms. Additionally, our new procurement process workflow templates automate approval steps and tie seamlessly into workflow automation. By using our forms and templates to automate as much of the procure-to-pay process as possible, you not only save money and create efficiencies, but you also free up time that you and your team can spend on growing your business.

Every business must create a workflow for buying the supplies and services it needs to operate. The more streamlined this process is, the more efficient a company will be. A tool like Jotform, which allows you to automate most of the procure-to-pay process, is your ticket to success.