Tips And Best Practices For A Procure To Pay Cycle

Here are a few steps you can take to maximize the productivity of your supply chain system.

Mnet 191070 Supply Chain
Jake AndersonJake Anderson

The deployment of new supply chain systems is a complex network of interworking personnel, suppliers and supplier personnel. Getting all of these connected pieces to function together takes time and strategy. When you assess the financial performance of your company, you typically review your various revenue streams and your bottom line. But, we’ve all been rumbled around by a shaky economy and people are increasingly concerned with company cost and opportunities for efficiency growth.

Here are a few steps you can take to maximize the productivity of your supply chain system:

Strategic Sourcing

Taking time to strategically source has become an absolutely integral part of any successful supply chain. Developing a strategy to make procurement decisions is the ideal situation for larger corporations looking to maximize the amount of items received for funds allotted. Smaller companies are less likely to take this approach and focus on more traditional methods of procurement as their needs are smaller, with fewer transactions to worry about. Yet, paying close attention to strategy is never a bad idea, no matter the size of your company, and could mean a more focused contribution to the savings of your company.

Positive Relationships Between Supplier and Consumer

The relationships between the two symbiotic entities — Supplier and Consumer — should be as positive as possible even when transactions aren’t taking place. This is a beneficial relationship to have when suppliers have the knowledge to assist and advise buyers on methods concerning the installation, operation, production and service of goods. Smaller businesses that don’t depend on bulk supply may not place as much importance on relationships, but this is not recommended as it is always advantageous to have as many people working with, and for you.

Automated Software

Technology has vastly improved and accelerated the way companies procure items. Automated services speed up the the efficiency of these processes and make them remarkably simpler. Procure to pay solutions providers go even further and assist not only with the procurement process, but simplifies the entire supply chain system through automation, which frees executives up to develop strategy and focus more on the big picture and less on the day to day.

Don’t Forget to Be Thorough

It may seem obvious, but with all the pieces that are involved in the procurement process, it helps to be as thorough as possible. Procurement misunderstandings happen and at small scale they might not be too much of a financial burden, but with large conglomerates an accidental zero or two may be detrimental to workflow and cause serious disruption. Avoid duplications on deliverables at all cost, as disputes between Supplier and Consumer can be the root of larger problems to come. Proper management of purchase orders can protect you in case of such a dispute, as they keep track of what was ordered, when, and for how much. Even if this has never been an issue in the past, running a tight ship is never a bad idea.

The easiest way to mitigate the possibility of error on the procure-to-pay supply chain is to invest in the implementation an ERP system in the day-to-day operation of your business.