Purchase-to-Pay Pain Points & Solutions - The Quick Win Fee Opportunity for Advisors
As accounting firms and advisors seek out new revenue opportunities, they need look no further than their clients purchase-to-pay (P2P) processes. There are many reasons why this critical process provides a compelling ‘quick-win’ for businesses and therefore an opportunity for advisors to deliver more value:
- It’s a ‘pre-accounting process’ ie ensuring a best best purchasing process delivers significant benefits to compliance and accounting processes
- Improving purchasing can deliver significant, measurable and sustainable profit improvements
- Eliminating bottlenecks and inefficiencies in the purchase-to-pay process frees up accounts payables teams to do more valuable tasks
- Suppliers perform better and can offer better pricing or early settlement discounts when the process of getting paid gets easier
- Implementing process compliance, purchase approvals and reporting reduces the risk of fraud
In a recent survey by Consider Solutions, over 50% of respondents rated ‘avoiding late payments’ as the biggest challenge in their invoice to pay process. Interestingly for many businesses, the process for getting a supplier paid on time is typically manual and highly inefficient. In excess of 80% of companies use manual processes such as email, phone calls, online portals and spreadsheets to raise, approve and place orders with suppliers.
As a result, the company has limited visibility over the purchasing process and tend to have few controls in place. Hence, purchase invoices often arrive with the AP team with limited or no audit trail or history. The process of getting the invoice checked, approved and paid can be time-consuming and complex and as a result, suppliers are often paid late through no fault of their own. Whilst this may be seen as a minor inconvenience for some, it can be life or death for a small company.
This is especially true for small and mid sized businesses. They’re too big for the owner or accountant to keep an eye on every transaction and their small business software such as QuickBooks Online, Sage 50 or Xero lack the necessary capabilities to handle purchasing. Many large enterprises operate ERP with sophisticated (but often cumbersome) processes in place for requisitions, orders, approvals and invoices.
The next 6 Biggest P2P Pain Points in Consider Solutions findings are all related to the menace of manual processes. Ensuring accuracy of master data, improving PO compliance, an overload of manual processes, duplicate invoices, risk of fraud and managing PO and invoice errors are all a direct result of inefficient processes by inexperienced or junior employees, who are probably not aware of the importance of accuracy and efficiency.
As advisors to small and medium sized businesses, there is a significant opportunity to take a look at optimising your clients’ P2P processes. The benefits to clients are huge - instant bottom line improvements, reduced wastage and better terms with suppliers.
For accounting firms and advisors looking to differentiate their offering and proactively grow their practice, Purchasing presents a unique consulting and/or service provision solution to drive fee income and/or recurring revenues. By implementing best in class Purchase-to-Pay software, such as Zahara, firms can charge fees to cover consulting, implementations and training. For outsourcing firms and service providers, P2P software can underpin an outsourced AP process and provide a predictable monthly revenue stream.
So if you’re looking to stand out from your competitors and deliver more value to your clients, take a look at Zahara.Research Source: Consider Solutions