Transaction risk intelligence
Automated supplier statement reconciliation
Supplier risk intelligence
Managed AP recovery audit
Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
It’s a question that finance professionals have been asking themselves ever since the first accountant created the ledger. How can the purchase to pay process become more efficient? And what factors are at play when optimising P2P efficiency?
Which mistakes are affecting your P2P efficiency?
Keeping incorrect or duplicate supplier data.
A common cause of headaches to any finance team, is a wrongly allocated supplier. This is commonly caused by a confusing supplier file. Two slightly differing entries from the same supplier, but one with an updated billing address and bank account, can cause an incorrect payment and any number of hours trying to rectify and reclaim it. This wasted time can play havoc with P2P efficiency.
Don’t wait until there’s a mistake, cleanse that supplier file often and remove multiple supplier instances from the supplier file (with a little help from us, if you like).
Missing duplicate invoices and overpayments.
As we just mentioned, not only is it time-consuming to recoup overpaid funds, and costly, but it creates work on top of the existing workload. Overpayments are something we can’t completely plan for. Although we know there will be a few to deal with, it still affects how fast an AP team can go about their tasks.
To ensure you don’t miss duplicate invoices and make overpayments, we recommend you complete regular checks on your transactions. While many use 3-ways matching to help identify errors and duplicates, it isn’t a perfect system and much can slip through the net (find out why in our blog). Catch them all with a full transactional risk management software, like FISCAL’s solution.
Not nurturing supplier relationships.
A weak supplier relationship can cause many issues, not only for your finance team, but for the whole business. In worst-case scenarios, vendors may refuse to supply you with goods or services due to a damaged relationship.
It’s therefore a good idea to keep those relationships strong, particularly with key suppliers. That means updating them regularly on payments, paying to terms consistently and giving them orders in plenty of time, to say the least. You’ll minimise the time spent on the phone with enquiries in this way, which will in turn improve P2P efficiency. As a bonus to this, it’s more likely you’ll negotiate favorable terms, ensure timely deliveries, and minimise supply chain disruptions.
Ignoring the detail in analytics and reports.
An area that creates some real value is purchase to pay reports, but often it’s overlooked due to time constraints. We recommend setting apart some time to investigate your reports further. In fact, we’ve talked more about how you can do this in our blog ‘Surprisingly simple accounts payable KPIs to measure for great results’.
Neglecting to regularly review processes.
Many factors affect how a finance team runs: New or updated technology, changing team members or structure, new business objectives and so on. Because of these influences, often and team can become ineffective as they do not change their ways of working to accommodate new challenges or changes. Therefore, it’s imperative that you review processes regularly to ensure that everything is as efficient as possible. Ideally, after a week or two of dealing with a change, you and your team would need to discuss and review any problems or changes in productivity.
Siloing departments.
Every department is not an island. For an organisation to succeed, departments need to work together and share information and understanding. Fostering collaboration and bringing consistency between departments can really help to create a more effective, and therefore more efficient team.
Not utilising technology and automation.
By far, the number one P2P efficiency killer is manual work and time-consuming tasks. Think, invoice data entry, statement reconciliation, fraud checking, duplicate invoice detection, and so on. Luckily, Fintech companies like FISCAL are there to help. Technologies allow for fast and accurate automation of these difficult tasks, saving huge amounts of time and freeing up the team to complete payments faster.
Holding back on creating an innovative culture.
Supporting and encouraging an innovative culture is very important. Not just for people to have many outlets for their thoughts and ideas, but so the business can use these ideas to create more efficient, easy ways of working. People are the heart of the organisation, and the feet on the ground are often the first to know if a process could be improved. Ensure opinions are sought and conversations are had regularly – every couple of weeks, or monthly. Don’t get too caught up in the everyday – it can cloud your judgement as to what is truly achievable.
Not providing regular training and education.
Process compliance is integral to the continued effectiveness of the finance function, and unfortunately we know that some individuals have trouble sticking to it. And it dramatically impacts P2P efficiency. Incorrectly onboarded suppliers, neglected compliance to PO processes, and more, make your data more complex than it should be. Staff can easily make mistakes or waste time sorting through this difficult data. So, complete and regular process training is extremely important for all individuals in the process, from those creating POs to those processing invoices for payment.
Conclusion: The P2P efficiency mistakes to avoid.
Ensure your procure to pay team works effectively by avoiding the following P2P efficiency mistakes:
- Keeping incorrect or duplicate supplier data.
- Missing duplicate invoices and overpayments.
- Not nurturing supplier relationships.
- Ignoring the detail in analytics and reports.
- Neglecting to regularly review processes.
- Siloing departments
- Not utilising technology and automation.
- Holding back on an innovative culture.
- Not providing regular training and education.
How FISCAL helps you avoid P2P efficiency mistakes.
Our transaction risk management software analyses your transactions and suppliers, and gives you real-time risks to look into. It’s one of the most sophisticated on the market, using forensic-level tests and AI to deliver comprehensive tests and uncover all risks.
Transactions
We identify many risk factors in your invoices that might cause problems in the future, from inconsistent invoice numbers and PO numbers, to unusual payment methods for that supplier, and duplicate invoices.
Suppliers
Our dedicated module focuses on finding dormant and duplicate suppliers, helping you keep your supplier file tidy and uncomplicated.
Reports
Our software comes complete with pre-built reports to make P2P analytics simple, and an AI report generator. These reports can be customised so that you see all the information you need to improve the speed of your payables processes.
