Improving Accounts Payable
Have you ever spent 20 minutes or more filling out a purchase order or requisition for something that cost just a few dollars? Chances are, the time you spent on paperwork cost the business far more than the item you needed to purchase. Plus, that doesn’t include the time spent by others reviewing and approving your request nor does it consider other issues such as potential vendor discounts that may be available. By moving from a paper-based accounts payable system to an electronic one such as SAP Procure-to-Pay, inefficiencies in Accounts Payable, such as for low-value purchases, can be improved dramatically (Source: http://www.dolphin-corp.com/business-process-management/accounts-payable-for-sap/). In addition, SAP Procure-to-Pay helps Accounts Payable take advantage of early payment discounts or expand the payment cycle when it makes financial sense to do so.
Reducing Payment Costs
SAP Procure-to-Pay can also improve cash management by reducing costs associated with payments. According to Aberdeen Group, the average cost per transaction for writing checks is $7.15 while the average cost of using ACH was just $4.72. Using a commercial card was even cheaper at just $3.96. By using SAP Procure-to-Pay and a purchasing card, you can slash your payment costs as well as automate payments. Not only will you cut your payment costs, your vendors will be paid faster (making them happy and more likely to be responsive to your needs) and you will be able to delay your payment to the purchasing card (improving cash flow).
Using SAP Procure-to-Pay in conjunction with an electronic payment method such as a purchasing card can improve Accounts Payable, reduce payment costs, reduce the tedious, time-consuming nature of paper-based purchase orders, and improve cash management. These are just a few examples of how SAP Procure-to-Pay can improve cash management. How are you using automation to boost your bottom line?