Streamlining Supply Chain Management: Perfecting Your Purchase to Pay Processes

Supply chain management is the lifeblood of any business: without a proper, streamlined supply chain, your company risks being left without the proper tools it needs to get things done. If you already have a great supply chain, then you are ahead of the game. If your supply chain isn’t as efficient as you’d like it to be, it’s time to fix it quickly.

Supply Chain Management - SCM

There are many points where problems can arise along the supply chain, but one of the most common areas that managers can look at to create more efficiency is the purchase to pay process (P2P). Streamlining your invoicing procedures will not only ensure that your company always has what it needs, but it will allow you to collect your money — or pay your bills — quickly.

Here are a few ways you can increase the efficiency of your purchase to pay process.

Look at Sourcing

Sourcing is the very beginning of the pay to purchase process, so it stands that it’s also a great place to start looking for ways to make it run more efficiently.

Good communication is key for streamlined sourcing practices. It usually begins with one department asking the purchasing department to procure a specific item for the company. The two departments must work closely together to make sure that you receive the correct products in the right quantities whenever you need it. This means that purchasing should know if the product is a one-off order or if the product will need to be restocked regularly.

A lack of good communication can lead to costly mistakes that waste time and money. Improper ordering can be a constant problem when your purchasing department isn’t 100% sure about what they need to order in the correct numbers. Nipping this problem in the bud as quickly as possible is a great start to streamlining your P2P.


The actual process of purchasing the products is another constant struggle, especially when creating new orders for a company. There are a couple of things to keep your eye on, here.

This is the time where the orders are actually placed, so make sure you’ve negotiated any contracts to your satisfaction and that they won’t put an undue burden on any of your other departments. With today’s technology, there’s really no excuse to not send your orders electronically, but if for some reason you want to stick with paper, make sure to allow for the postage time: you don’t want to wait until the last minute to get your orders in and then find yourself lacking the products you need.

Purchasing is an important step in the PSP process, so you want to double-check everything and make sure there are no mistakes.


Improper invoicing processes can be very detrimental to your company: dealing with late fees and unpaid bills are inexcusable ways to throw away money.

One of the most common ways to ensure your invoicing is efficient is to use a 3-way matching system. This is where your automated invoicing matches three separate documents — the actual invoice, the purchase order, and the receiving report — to keep track of all of your orders. Once all three of these documents are accounted for, you know that the bill is now due and you can pay in a timely manner.

Not only will a 3-way matching system protect you from unpaid invoices and late fees, it can also help you save money if you and the vendor have agreed to discounts for early payments. Many vendors offer these discounts to keep their cash flow moving, so take advantage of them whenever you can.


The only way you will know if your efforts to streamline your P2P are working is if you comb through the data before and after you implement your new strategies.

By studying your P2P process before and after, you can notice any trends that are helping or hurting the process so you can continue to make adjustments. It may take a long time for your efforts pay off, so staying on top of your purchasing and supply chain data will show you how much more work you need to do.

Not only will analytics help you streamline your process, keeping track of all purchases will allow you to stay ahead of any rogue spending or price increases from vendors as well.

Having an efficient P2P process is key to saving your company time and money.


Leave a Reply

Your email address will not be published. Required fields are marked *