Today, it is common to see a negotiating team achieving consensus on a deal and then everyone involved in the collaboration to get the deal stand and share a fist pump or high-five palm slap. It is a symbol of a win-win result. Win-Win deals require effective communication, which is fostered by transparency. The same transparency effort in the supply chain relationships is based on the transparency of deal terms and may result in a fist pump celebration for all involved. 

Benefits of Implementing a Digital Procurement to Pay Platform: This is the fifth post in a continuing series exploring specific solutions available to the many business process problems identified under the general heading of AP Problems. The first post in this series is AP Problem #1: High Defect Rates  here.

AP Problem #5:  A Lack of Transparency in the ( Purchaser) Procurement

to (Supplier) Payment Process Chain of Delivering Superior Customer Performance

Today, it is common for two or more individuals who have achieved success in their shared moment of performance success to fist pump or high-five one another.

Fist pumping has become a visual sign of recognition of achieving a win-win for all participants. Visually, the fist pump message visually is the ultimate feels good moment and creates a sense of collaboration spirit from a shared accomplishment.

Nowhere in life, is there a greater spirit example of a win-win scenario that is more important than in your relationships with your network of suppliers.

 

Generally, it is a pearl of accepted wisdom that

you are only as good as those who you recruit to your supply chain.

 

Suppliers are part of a customer chain that links from their warehouse all the way through your own value-add process of delivery. Your shared goal is to achieve a high level of satisfactory performance with your customer.

Consider why transparency in procure to pay is a critical performance process for your business?

When you visualize your supply chain network it is graphically connecting all the dots in completing an often complex transaction. Your customer’s satisfaction with your performance is the endpoint in this web of procurement transactions. These supplier sourcing dots form a chain of nodes from your supplier’s efforts to win and keep your business, all the way through to your own efforts to win and keep your customers’ business.

 

What ties these supplier nodes together is their shared performance

of being transparent to each other as they share a responsibility to be customer-driven.

 

Today’s supplier is tomorrow’s collaborator in building the future success of your business.

 

And one of the main ingredients in getting to a shared fist pump is a sense of trust in each other and that requires effective communication.

Transparency and Communication are the Objectives of Procure to Pay

Effective communication in purchasing and payment performance is based on being transparent in what needs to be accomplished.

Transparency with suppliers is achieved in the which, why, when, and how of what is to be accomplished. Most important is transparency on the terms of the financial reward for success. In a word, cost efficiency in purchasing deals among suppliers in turn demands transparency from order requisitioning to supplier’s invoice payment approvals.

 

Transparency means that everyone knows where they stand,

and at any point in time during the fulfillment, delivery, and payment process.

 

But here’s the threat to effective transparency. It’s paper.

 

Traditionally, paper-based AP systems lack transparency, making them convoluted, cumbersome and prone to error.

The enemy of transparency is the awkwardness of sharing paper and tracking paper versions because when invoice paper do not flow, neither do the cheques owing to suppliers. Invoices quickly become overdue.

Everyone inside and outside these paper transactions is operating in the dark. Not a good outcome for either the purchaser or the supplier.

The symptom of paper paralysis multiplies the time delay in payment completion. While time is money, but uncontrolled money losses are the real cost of lost time in payables. Lost time is the very definition of inefficiency.

Cost of Paper Payables Processing is Much More Than Failing in Transparency

  • Paper records are never there when you need them.
  • Missing paper create discrepancies as your organization.
  • Your suppliers deal with outdated or inaccurate copies of purchase orders or invoices.
  • Even when some automation is attempted, many software automation programs lack easy access for multiple users.
  • An incomplete solution can frequently result in more confusion than even paper processes.
  • Automating with OCR actually can accelerate the growth in your defect rate, instead of reducing it.

 

Lack of transparency will often cause errors, miscommunication, delays,

or even create a condition for fraud to exist without immediate detection.

 

The most effective solution to avoid these losses and sapping of staff morale

is to implement a paperless procure-to-pay system.

Install SnapAP’s Procure 2 Pay Solution in Front of all Your Purchasing.

At SnapAP over the past decade, we studied the problem using the Six Sigma solution development process.

As a result of this careful study, with SnapAP installed, your business will have an easily accessible, undisputable factual record of all purchase and payment activities. These records are easily accessed and managed by all involved parties in your supplier network.

Every step becomes entirely transparent because both sides are seeing the same secure dashboard of processing steps and transaction status.

SnapAP’s Purchase to Pay with automated Accounts Payable status reporting included provides total transparency to you and your supplier(s), throughout each step in the supplier’s transaction process.

  • Invoices are tracked and matched to purchase orders and receipts for maximum clarity.
  • All information is available with drill-down capability from your online dashboard.
  • From your Supplier’s Portal login, all transaction payment information is shared exclusively and securely with each of your suppliers.

 

Every step from payments, to Invoices, to Receipts, to Purchase Orders

are all available in one click viewing.

 

You may grant access as part of your supplier authorization

and communication management program to every supplier.

 

The benefit to finance is that you can leverage SnapAP’s integrated platform to track costs throughout the organization for an accurate and timely overview of expenses. From any connected device, you can easily confirm that suppliers have received error-free purchase orders and the status of their payment cycle.

Benefits and Payback from Implementing SnapAP Procure to Pay

  • With SnapAP’s accounts-payable software, multiple users will have access to these AP reports, meaning there is one, simple, error-free version of the fact-based record of purchase activities and agreements.
  • External Audit capacity, record archiving and transparency is where the payback on choosing the SnapAP P2P solution gets real in terms of longer-term performance enhancement benefits to your business.
  • Your all-digital SnapAP platform eliminates the need for paper copying, document resending and individual staff responding to all other time-consuming supplier inquiries.
  • With SnapAP installed, you have everybody involved within your supply chain of product or services operating as a coordinated team from the same page.

 

The big bonus for your suppliers is that you can make quicker,

and more accurate payments leading to better relationships with suppliers.

 

Enhance your purchasing process by visiting SnapAP Procure to Pay to learn more about SnapAP’s paperless accounts payable system.

Download our SnapAP E-Book or schedule a demo and see first-hand the benefits a transparent and paper-free system will have for your organization.

SnapAP offers a no-obligation Calculate Your Savings calculator submission form that may help you assess your decision to enhance your AP with automation and transparency for your suppliers. In return, you will get an initial savings estimate and a further drill down on potential savings if you prefer to investigate further.

Previous Accounts Payables Series Posts:

 AP Problem #4: Lack of System Integration

AP Problem # 3. Lost Paper: Lost Time & A Productivity Sink Hole

AP Problem #2: Finding A Solution to Poor Supplier Relationships

AP Problem # 1: Get Your Payables Process Right, the First Time, Lower Defect Rate