SAP Procure to Pay

Spend Management: SAP Procure to Pay

Businesses are vulnerable today. External factors can affect procurement, from pricing negotiations to supplier management. Disorganization in procurement can lead to using non approved vendors, ordering products outside of the purchasing department, or a combination of both.

Procure to Pay Simply Defined

A procure to pay process includes sub processes that help meet the goal of paying invoices on time while maximizing cash flow. Businesses may use a combination of solutions including SAP, to support each level of the sub processes.

The key sub processes of SAP Procure to Pay include:

1. Purchase Requisition. A request for more stock by material and quantity.
2. Purchase Order. Assigning the request to a vendor, with an agreed price and payment/delivery terms.
3. Order Confirmation: Receipt confirmation from the vendor with a confirmed delivery date.
4. Delivery Notification. Receiving the purchase order into inventory per the delivery terms.
5. Approval and Invoice Payment. Finance approval and release of payment to the vendor.

It is also important to Evaluate Supplier Performance by reviewing compliance, quality, responsiveness and on time delivery measures. This will validate that you are using the best performing vendors for your partnerships.

Spend Management: SAP Procure to Pay

Businesses are vulnerable today. External factors can affect procurement, from pricing negotiations to supplier management. Disorganization in procurement can lead to using non approved vendors, ordering products outside of the purchasing department, or a combination of both.

Procure to Pay Simply Defined

A procure to pay process includes sub processes that help meet the goal of paying invoices on time while maximizing cash flow. Businesses may use a combination of solutions including SAP, to support each level of the sub processes.

The key sub processes of SAP Procure to Pay include:

1. Purchase Requisition. A request for more stock by material and quantity.
2. Purchase Order. Assigning the request to a vendor, with an agreed price and payment/delivery terms.
3. Order Confirmation: Receipt confirmation from the vendor with a confirmed delivery date.
4. Delivery Notification. Receiving the purchase order into inventory per the delivery terms.
5. Approval and Invoice Payment. Finance approval and release of payment to the vendor.

It is also important to Evaluate Supplier Performance by reviewing compliance, quality, responsiveness and on time delivery measures. This will validate that you are using the best performing vendors for your partnerships.

Key Capabilities include:

• SAP Procure to Pay data on suppliers are digitally stored in a central place in real time.
• Buyers evaluate online catalogs from existing and new suppliers, review and approve purchase orders, and check the status of shipments in electronic formats.
• Cloud-based data with SAP Procure to Pay can create approval flows, ensuring savings reach your bottom-line.

SAP Procure to Pay: Tips for Success

1. Set realistic timelines. Set time to define a holistic framework of business and technical requirements.
2. Choose stakeholders wisely. Include diverse global stakeholders working toward standardizing best practices.
3. Keep it simple. See where requirements can be condensed or combined to keep processes simplified.
4. Be flexible. Consider all suggestions but think carefully about the optimal solutions.
5. Do excessive testing. Test with real life scenario test scripts to help you find and resolve gaps.

Technical resources partners for consideration might be – SAP, Icertis or OpsVeda.

Further resources for SAPinsiders

• The Case for Automation in Procure to Pay. Rizal Ahmed, SAPinsider gives insight on what has changed today is the ease that you can apply to automation without heavy coding or integration.
• Procurement Transformation: Automation in P2P: Shashi Jina, SAPinsiderreviews an automation footprint of functions and capabilities with SAP Procure to Pay in this article .
• Procurement Pivotal to Managing Disruptions Says SAP Research: John Yuva, SAPinsider investigates a survey about what keeps supply chain professionals up at night, read it here.