Puzzle.Fotolia_53004851_XS.jpgDuring the great recession, companies were seeking a variety of solutions to reduce costs while preserving revenue and profits. Staff layoffs, purchasing reductions, and consolidation were common options employed. “Doing more with less” became the mantra.

As companies continue to strive for efficiency with spend and resources, more are examining the value gained by achieving greater collaboration between the two biggest “money managers” within their organizations … procurement and finance. 

In global businesses, procurement oversees billions in annual spend while the accounts payable (AP) team is responsible for paying the invoices generated by that spend. Despite the mutual dependency these two functions have with each other, collaboration across the procure-to-pay process doesn’t often result. A recent story at Procurement Leaders by Ellen Leith with Accounts Payable News illustrates the conundrum.

Ariba’s Drew Hofler frequently speaks about the procure-to-pay process and the value gained through better collaboration across these functions. Drew will lead a series of discussions on better cash management at Ariba LIVE, which takes place March 17 to 19 in Las Vegas and April 8 to 10 in Rome.

Last month, Drew and I discussed how better contract visibility within procure-to-pay enables AP to ensure pricing compliance with invoices and reduce millions in lost savings from contract leakage. For this interview, we explored how companies are succeeding when this collaboration takes hold.


Q.  What additional benefits are being gained with procure-to-pay collaboration?

One advantage that businesses are starting to realize is predictive analytics in finance. Improved visibility with contracts and procurement activities enables finance to anticipate spend and payment patterns.  As a result, finance is armed with insights to better manage working capital.

There are also process and cost efficiencies that businesses achieve.  James McDonald, Director of Procurement Operations at ING U.S., talks about how the company reduced its accounts payable team from 35 FTEs to 8 FTEs with e-invoicing. Staff members were redeployed to more strategic roles, such as managing the purchasing card program and enabling suppliers with e-invoicing. ING states that 82% of its invoices now bypass accounts payable thanks to automation.


Q. Which companies stand out as examples of success with the procure-to-pay process?

ING U.S. and Flint Hills have great stories to share about the benefits they’ve achieved with collaboration across procurement and finance. Both companies will talk about their experiences at Ariba LIVE during a session titled “From Silo to Synergy: How e-Invoicing Drives Value into a Larger Procure-to-Pay Initiative.”

As more companies begin to recognize the value that’s available within their procure-to-pay process, there will be many more success stories to share.


Drew delivers insights on e-invoicing and networked collaboration on Twitter using the hashtag #einvoicing. Follow Drew on Twitter @dhofler and read his blog postings at SAP Business Trends.


Follow Debbie on Twitter at @DebCM.


Photo:  © .shock – Fotolia.com

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