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What are the challenges in the procure-to-pay process?
The challenges in the procure-to-pay processes are rooted in a lack of data and transparency, redundant manual tasks, and inefficient communications. The typical difficulties include uninformed decisions, risk of fraud and non-compliance, inefficient spend management, and inefficient, time-consuming processes. These can incur extraneous costs and affect the bottom line of the organization directly, so they need to be addressed.
When procurement departments do not have a sufficient amount of past and real-time data about vendors and their products, they can not assess risks or compare vendors effectively. This blind spot makes risk management and resilience-building difficult.
Lack of visibility can cause incorrect order estimates in PRs, rogue spending, dark purchasing, risk of fraud, expiring contracts, and inaccurate, delayed, or missed payments. Budget overruns can be common. Similarly, manual data entries can cause lags in the process and be error-prone. Tracking supplier performances manually can be complicated, and relationships with good suppliers can deteriorate because of problems in disbursing payments timely. Manual KPI calculation suffers from a lack of accurate data. Internal and external communication failures can make the process lengthy and erroneous as well.
Typically organizations opt to use a central procurement platform by employing software to solve these problems.