{"id":1100,"date":"2013-07-17T14:19:27","date_gmt":"2013-07-17T14:19:27","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=1100"},"modified":"2022-07-04T09:42:31","modified_gmt":"2022-07-04T09:42:31","slug":"streamlining-purchase-to-pay-to-eliminate-work-in-accounts-payable","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2013\/07\/streamlining-purchase-to-pay-to-eliminate-work-in-accounts-payable\/","title":{"rendered":"Streamlining Purchase-to-Pay to Eliminate Work in Accounts Payable"},"content":{"rendered":"

In Purchase-to-Pay, it is the exceptions to the process that requires most of the effort by the Accounts Payable<\/a> team, often with a ripple effect across the entire end-to-end process.\u00a0 Even companies who have successfully automated most of their direct material transactions with high rates of electronic payments continue to struggle with the biggest frustration for any organization \u2013 handling exceptions to the process.<\/p>\n

During a recent Peercast, we explored the approaches taken by our feature, a $15B global manufacturing company.\u00a0 Not surprisingly, the majority of transactions are for direct material, where the process is highly automated and efficient.\u00a0 Purchasing sends the order via EDI<\/a> to the supplier (EDI 850 and 866 transactions), and the suppliers send Advance Ship Notifications (EDI 856 ASNs).\u00a0 The Receiving process is also efficient with bar code labels on all shipments.\u00a0 There are no invoices \u2013 they use Evaluated Receipts Settlement<\/a> with a penetration rate of 95% for all production material.<\/p>\n

Indirect spending has been more challenging, with more than 60% of the transactions using paper invoices.\u00a0 For these transactions, the manual verification of paper invoices to ensure proper account coding and signatures is a big effort, and there is also a significant effort to manage the exceptions for indirect spending that have an associated purchase order. During the Peercast, our feature discussed five initiatives that were successful in reducing indirect spend exceptions.\u00a0 Here is a summary of two of them:<\/p>\n